Shenandoah Telecommunications (NASDAQ:SHEN) and Telefonica Brasil (NYSE:VIV) are both utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Earnings & Valuation

This table compares Shenandoah Telecommunications and Telefonica Brasil’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shenandoah Telecommunications $630.85 million 3.01 $46.60 million $0.93 40.91
Telefonica Brasil $11.41 billion 1.89 $2.44 billion $1.39 9.19

Telefonica Brasil has higher revenue and earnings than Shenandoah Telecommunications. Telefonica Brasil is trading at a lower price-to-earnings ratio than Shenandoah Telecommunications, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Shenandoah Telecommunications has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500. Comparatively, Telefonica Brasil has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Institutional and Insider Ownership

48.9% of Shenandoah Telecommunications shares are owned by institutional investors. Comparatively, 9.7% of Telefonica Brasil shares are owned by institutional investors. 4.7% of Shenandoah Telecommunications shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Shenandoah Telecommunications pays an annual dividend of $0.27 per share and has a dividend yield of 0.7%. Telefonica Brasil pays an annual dividend of $0.30 per share and has a dividend yield of 2.3%. Shenandoah Telecommunications pays out 29.0% of its earnings in the form of a dividend. Telefonica Brasil pays out 21.6% 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. Shenandoah Telecommunications has increased its dividend for 6 consecutive years. Telefonica Brasil is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Shenandoah Telecommunications and Telefonica Brasil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shenandoah Telecommunications 8.23% 11.86% 3.36%
Telefonica Brasil 21.05% 10.59% 7.18%

Analyst Ratings

This is a summary of current ratings and recommmendations for Shenandoah Telecommunications and Telefonica Brasil, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shenandoah Telecommunications 0 1 2 0 2.67
Telefonica Brasil 1 2 5 0 2.50

Shenandoah Telecommunications presently has a consensus target price of $50.50, suggesting a potential upside of 32.72%. Telefonica Brasil has a consensus target price of $13.83, suggesting a potential upside of 8.33%. Given Shenandoah Telecommunications’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Shenandoah Telecommunications is more favorable than Telefonica Brasil.

Summary

Telefonica Brasil beats Shenandoah Telecommunications on 9 of the 17 factors compared between the two stocks.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company, through its subsidiaries, primarily provides wireless, cable, and wireline telecommunications services to customers and other telecommunications providers. The company operates in three segments: Wireless, Cable, and Wireline. The Wireless segment provides digital wireless mobile services; and wireless mobility communications network products and services. It owns 208 cell site towers built on leased land and owned land; and leases space on towers to affiliated and non-affiliated third party wireless service providers. This segment provides its services in central and western Virginia, south-central Pennsylvania, West Virginia, Maryland, North Carolina, Kentucky, Tennessee, and Ohio. The Cable segment offers video, broadband, and voice services in Virginia, West Virginia, and western Maryland; and leases fiber optic facilities. The Wireline segment provides regulated and unregulated voice services, Internet broadband, and long distance access services, as well as leases fiber optic facilities throughout portions of Virginia, West Virginia, Maryland, and Pennsylvania. Shenandoah Telecommunications Company also maintains an interstate fiber optic network; and offers unregulated communications equipment sales and services. The company provides its products and services under the Sprint and Shentel brands. Shenandoah Telecommunications Company was founded in 1902 and is headquartered in Edinburg, Virginia.

About Telefonica Brasil

Telefônica Brasil S.A. provides mobile and fixed telecommunications services to residential and corporate customers in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband Internet access through 3G, 4G, and 4.5G, as well as mobile value-added services and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through direct to home satellite technology, IPTV, and cable, as well as pay-per-view and video on demand services; network services, such as rental of facilities; other services comprising Internet access, private network connectivity, computer equipment leasing, extended, caller identification, voice mail, cellular blocker, and others; wholesale services, including interconnection services to users of other network providers; and digital services, such as entertainment, cloud, and financial services. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices, such as smartphones, broadband USB modems, and other devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, manufacturing, services, financial institutions, government, etc. Telefônica Brasil S.A. markets and sells its solutions through own stores, dealers, retail and distribution channels, door-to-door sales, and telesales. The company was formerly known as Telecomunicações de São Paulo S.A. – TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil. Telefônica Brasil S.A. is a subsidiary of SP Telecomunicações Participações Ltda.

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