Analyzing Telstra (TLSYY) and Telecom Argentina (TEO)

Telstra (OTCMKTS:TLSYY) and Telecom Argentina (NYSE:TEO) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

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This is a summary of recent ratings and recommmendations for Telstra and Telecom Argentina, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telstra 0 0 2 0 3.00
Telecom Argentina 1 3 0 0 1.75

Institutional and Insider Ownership

0.1% of Telstra shares are owned by institutional investors. Comparatively, 6.8% of Telecom Argentina shares are owned by institutional investors. 1.0% of Telecom Argentina shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Telstra and Telecom Argentina’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telstra $20.17 billion 1.35 $2.76 billion $1.16 9.87
Telecom Argentina $3.95 billion 0.75 $460.85 million $2.39 6.38

Telstra has higher revenue and earnings than Telecom Argentina. Telecom Argentina is trading at a lower price-to-earnings ratio than Telstra, indicating that it is currently the more affordable of the two stocks.

Dividends

Telstra pays an annual dividend of $0.76 per share and has a dividend yield of 6.6%. Telecom Argentina pays an annual dividend of $0.79 per share and has a dividend yield of 5.2%. Telstra pays out 65.5% of its earnings in the form of a dividend. Telecom Argentina pays out 33.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Volatility & Risk

Telstra has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Telecom Argentina has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares Telstra and Telecom Argentina’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telstra N/A N/A N/A
Telecom Argentina -9.90% -12.13% -6.22%

Summary

Telstra beats Telecom Argentina on 10 of the 15 factors compared between the two stocks.

Telstra Company Profile

Telstra Corporation Limited, together with its subsidiaries, provides telecommunications and information services to businesses, governments, communities, and individuals in Australia and internationally. It operates in four segments: Telstra Consumer and Small Business, Telstra Enterprise, Telstra Operations, and Telstra Wholesale. The company offers telecommunication products, services, and solutions across mobiles, fixed and mobile broadband, telephony and pay television/Internet protocol, and digital content; and online self-service capabilities, including buying, billing, and servicing requests, as well as operates inbound and outbound call centers, owned and licensed Telstra shops, and the Telstra dealership network. It also provides sales and contract management services for medium to large business and government customers; and product management services for advanced technology solutions and services, such as data and Internet protocol networks, and mobility applications and services, as well as network applications and services products comprising managed network, unified communications, cloud, industry solutions, and integrated services and monitoring. In addition, the company engages in the development of industry vertical solutions; planning, design, engineering architecture, and construction of Telstra networks, technology, and information technology solutions; and provision of a range of telecommunication products and services to other carriers, carriage service providers, and Internet service providers through its networks and related support systems. Further, it provides disconnection, media and marketing, and other services. The company was formerly known as Australian and Overseas Telecommunications Corporation Limited and changed its name to Telstra Corporation Limited in April 1993. Telstra Corporation Limited was founded in 1901 and is based in Melbourne, Australia.

Telecom Argentina Company Profile

Telecom Argentina SA engages in the provision of telecommunications services. It operates through the following segments: Fixed Services, Personal Mobile Services and Nucleo Mobile Services. The Fixed Services segment offers basic telephone services; interconnection services; data transmission and internet services; information and communication technology services; other telephone services; and sale of equipment. The Personal Mobile Services provides voice, data, internet services, and sells mobile communication devices. The Nucleo Mobile Services offers telecommunication services in Paraguay. The company was founded on January 5, 1990 is headquartered in Buenos Aires, Argentina.

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