Black Box Corporation (NASDAQ: BBOX) and Level 3 Communications (NYSE:LVLT) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Dividends

Black Box Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 15.2%. Level 3 Communications does not pay a dividend. Black Box Corporation pays out -44.4% of its earnings in the form of a dividend.

Insider & Institutional Ownership

91.0% of Black Box Corporation shares are owned by institutional investors. Comparatively, 98.7% of Level 3 Communications shares are owned by institutional investors. 3.7% of Black Box Corporation shares are owned by company insiders. Comparatively, 0.5% of Level 3 Communications shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Black Box Corporation and Level 3 Communications’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Black Box Corporation $828.90 million 0.06 $20.29 million ($1.08) -2.92
Level 3 Communications $8.17 billion 2.43 $2.66 billion $1.76 31.16

Level 3 Communications has higher revenue and earnings than Black Box Corporation. Black Box Corporation is trading at a lower price-to-earnings ratio than Level 3 Communications, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Black Box Corporation and Level 3 Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Black Box Corporation 0 1 0 0 2.00
Level 3 Communications 1 11 2 0 2.07

Black Box Corporation currently has a consensus price target of $10.00, indicating a potential upside of 217.46%. Level 3 Communications has a consensus price target of $61.03, indicating a potential upside of 11.27%. Given Black Box Corporation’s higher possible upside, equities analysts clearly believe Black Box Corporation is more favorable than Level 3 Communications.

Risk & Volatility

Black Box Corporation has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Level 3 Communications has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Profitability

This table compares Black Box Corporation and Level 3 Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Black Box Corporation -1.97% 3.05% 1.00%
Level 3 Communications 7.85% 5.80% 2.55%

Summary

Level 3 Communications beats Black Box Corporation on 12 of the 16 factors compared between the two stocks.

About Black Box Corporation

Black Box Corporation is a technology solutions provider. The Company is engaged in designing, building, managing and securing the information technology (IT) infrastructure. Offerings under the Company’s Products platform include IT infrastructure, specialty networking, multimedia and keyboard/video/mouse (KVM) switching. Offerings under its Services platform include unified communications, data infrastructure and managed services. It conducts business globally and manages its business on a geographic-service type basis consisting of four segments: North America Products, North America Services, International Products and International Services. The offerings of its Products platform are distributed through value-added resellers, direct marketing manufacturers, mass merchandisers, Web retailers and others. The offerings of its Services platform are distributed through value-added resellers, manufacturers and large system integrators, among others.

About Level 3 Communications

Level 3 Communications, Inc. is a provider of a range of integrated communications services. The Company’s operating segments include North America, EMEA and Latin America. The North America includes operations in Atlanta, Georgia; Littleton, Colorado; Miami, Florida; Montreal, Canada; New York, New York; Phoenix, Arizona; Pittsburgh, Pennsylvania; Southfield, Michigan, and Tulsa, Oklahoma. The Europe segment includes operations in Basingstoke, England; Crewe, England; Dublin, Ireland; London, England; Amsterdam, The Netherlands, and Paris, France. The Latin America includes operations in Colombia; Buenos Aires, Argentina; Caracas, Venezuela; Lima, Peru; Quito, Ecuador; Santiago, Chile, and Sao Paulo, Brazil. It offers optical, Internet Protocol, computing and storage technologies. It offers a range of communications services, including Internet Protocol (IP) and data services, transport and fiber services, colocation and data center services, security services and voice services.

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