Shaw Communications (NYSE: SJR) and BT Group PLC (NYSE:BT) are both large-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Insider & Institutional Ownership

51.9% of Shaw Communications shares are owned by institutional investors. Comparatively, 1.0% of BT Group PLC shares are owned by institutional investors. 1.0% of Shaw Communications shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Shaw Communications and BT Group PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shaw Communications 10.01% 9.31% 3.57%
BT Group PLC 7.14% 39.24% 6.77%

Valuation and Earnings

This table compares Shaw Communications and BT Group PLC’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Shaw Communications $4.13 billion 2.67 $1.65 billion $0.80 27.89
BT Group PLC $31.04 billion 1.22 $8.82 billion $1.04 18.37

BT Group PLC has higher revenue and earnings than Shaw Communications. BT Group PLC is trading at a lower price-to-earnings ratio than Shaw Communications, indicating that it is currently the more affordable of the two stocks.

Dividends

Shaw Communications pays an annual dividend of $0.95 per share and has a dividend yield of 4.3%. BT Group PLC pays an annual dividend of $0.94 per share and has a dividend yield of 4.9%. Shaw Communications pays out 118.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BT Group PLC pays out 90.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BT Group PLC has increased its dividend for 5 consecutive years. BT Group PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Shaw Communications has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, BT Group PLC has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Shaw Communications and BT Group PLC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shaw Communications 1 3 3 0 2.29
BT Group PLC 3 7 8 0 2.28

Shaw Communications presently has a consensus target price of $27.33, suggesting a potential upside of 22.52%. BT Group PLC has a consensus target price of $357.94, suggesting a potential upside of 1,774.04%. Given BT Group PLC’s higher possible upside, analysts clearly believe BT Group PLC is more favorable than Shaw Communications.

Summary

BT Group PLC beats Shaw Communications on 11 of the 17 factors compared between the two stocks.

Shaw Communications Company Profile

Shaw Communications Inc. (Shaw) is a diversified connectivity provider. The Company operates through four divisions: Consumer, Wireless, Business Network Services and Business Infrastructure Services. Under the Consumer division, the Company offers Cable telecommunications and Satellite video services to residential customers. Its Business Network Services division offers data networking, Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities. Its Business Infrastructure Services division offers data center colocation, cloud technology and managed information technology (IT) solutions to businesses. The Company offers wireless services for voice and data communications through its Wireless division. Its wireline services offer approximately 120 high definition (HD) channels and over 10,000 on-demand, pay-per-view and subscription movie and television programming titles.

BT Group PLC Company Profile

BT Group plc is a communications services company. The Company is engaged in selling fixed-voice services, broadband, mobile and television products and services, as well as managed networked information technology (IT) solutions and cyber security protection. Its segments include Consumer, which provides fixed-voice, broadband, TV and mobile services; EE, which is a mobile network operator in the United Kingdom and provides mobile and fixed communications services to consumers; Business and Public Sector, which provides communications and IT services to businesses and the public sector in the United Kingdom and the Republic of Ireland (RoI) ;Global Services, which provides managed networked IT services to corporate customers; Wholesale and Ventures, which provides fixed and mobile services to communications providers (CPs); and Openreach, which provides copper and fiber connections between its exchanges and homes and businesses.

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