BCE (NYSE: BCE) and Cincinnati Bell (NYSE:CBB) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Dividends

BCE pays an annual dividend of $2.13 per share and has a dividend yield of 4.5%. Cincinnati Bell does not pay a dividend. BCE pays out 87.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

44.4% of BCE shares are held by institutional investors. Comparatively, 85.1% of Cincinnati Bell shares are held by institutional investors. 0.2% of BCE shares are held by insiders. Comparatively, 1.4% of Cincinnati Bell shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares BCE and Cincinnati Bell’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BCE 12.85% 21.08% 5.78%
Cincinnati Bell 6.84% -3.87% 0.70%

Valuation & Earnings

This table compares BCE and Cincinnati Bell’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BCE $17.48 billion 2.45 $6.55 billion $2.44 19.48
Cincinnati Bell $1.17 billion 0.76 $282.90 million $1.65 12.79

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for BCE and Cincinnati Bell, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BCE 0 4 4 0 2.50
Cincinnati Bell 2 2 1 0 1.80

BCE currently has a consensus price target of $57.25, indicating a potential upside of 20.45%. Cincinnati Bell has a consensus price target of $23.50, indicating a potential upside of 11.37%. Given BCE’s stronger consensus rating and higher possible upside, equities research analysts plainly believe BCE is more favorable than Cincinnati Bell.

Volatility & Risk

BCE has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, Cincinnati Bell has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500.

Summary

BCE beats Cincinnati Bell on 11 of the 16 factors compared between the two stocks.

About BCE

BCE Inc. is a communications company. The Company’s segments include Bell Wireless, Bell Wireline and Bell Media. Its Bell Wireless segment provides wireless voice and data communications products and services to its residential, small and medium-sized business and large enterprise customers across Canada. Its Bell Wireline segment provides data, including Internet access and Internet protocol television (IPTV), local telephone, long distance, as well as other communications services and products to its residential, small and medium-sized business and large enterprise customers, primarily in Ontario, Quebec and the Atlantic provinces, while Satellite television (TV) service and connectivity to business customers are available nationally across Canada. Its Bell Media segment provides conventional, specialty and pay Television, digital media, and radio broadcasting services and out of home (OOH) advertising services to customers across Canada.

About Cincinnati Bell

Cincinnati Bell Inc., along with its subsidiaries, provides diversified telecommunications and technology services. The Company operates through two segments: Entertainment and Communications, and IT Services and Hardware. Through its Entertainment and Communications segment, the Company provides high-speed data, video and voice solutions to consumers and businesses over fiber network and a legacy copper network. The IT Services and Hardware segments operates through its subsidiary, Cincinnati Bell Technology Solutions Inc. (CBTS), which is engaged in the sale and service of end-to-end communications and information technology (IT) systems and solutions for business customers across the United States. The Company has interest in CyrusOne Inc., which operates carrier-neutral data center colocation business.

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