Critical Comparison: TELUS Corporation (TU) versus Verizon Communications (VZ)
TELUS Corporation (NYSE: TU) and Verizon Communications (NYSE:VZ) are both large-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.
This table compares TELUS Corporation and Verizon Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
51.1% of TELUS Corporation shares are held by institutional investors. Comparatively, 62.3% of Verizon Communications shares are held by institutional investors. 0.1% of Verizon Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares TELUS Corporation and Verizon Communications’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TELUS Corporation||$10.22 billion||2.11||$3.23 billion||$1.58||23.00|
|Verizon Communications||$123.64 billion||1.58||$43.95 billion||$3.90||12.29|
Verizon Communications has higher revenue and earnings than TELUS Corporation. Verizon Communications is trading at a lower price-to-earnings ratio than TELUS Corporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for TELUS Corporation and Verizon Communications, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
TELUS Corporation currently has a consensus price target of $45.00, suggesting a potential upside of 23.83%. Verizon Communications has a consensus price target of $52.87, suggesting a potential upside of 10.33%. Given TELUS Corporation’s stronger consensus rating and higher possible upside, equities research analysts plainly believe TELUS Corporation is more favorable than Verizon Communications.
TELUS Corporation pays an annual dividend of $1.46 per share and has a dividend yield of 4.0%. Verizon Communications pays an annual dividend of $2.31 per share and has a dividend yield of 4.8%. TELUS Corporation pays out 92.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Verizon Communications pays out 59.2% of its earnings in the form of a dividend. Verizon Communications has increased its dividend for 10 consecutive years. Verizon Communications is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
TELUS Corporation has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Verizon Communications has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.
Verizon Communications beats TELUS Corporation on 11 of the 16 factors compared between the two stocks.
About TELUS Corporation
TELUS Corporation (TELUS) is a telecommunications company. The Company provides a range of telecommunications services and products, including wireless and wireline voice and data. Its data services include Internet protocol (IP), television (TV), hosting, managed information technology and cloud-based services, and certain healthcare solutions. The Company operates through two business segments: Wireless segment and Wireline segment. Its wireless and wireline businesses are primarily operated through TELUS Communications Company (TCC). The Company offers business services, including healthcare, across wireless and wireline are supported through TELUS sales representatives, product specialists, independent dealers and online self-serve applications for small and medium-sized businesses (SMBs). Its business process outsourcing services are supported through sales representatives and client relationship management teams.
About Verizon Communications
Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales, to consumer, business and government customers across the United States. The Wireline segment offers voice, data and video communications products and services, such as broadband video, data center and cloud services, security and managed network services, and local and long distance voice services. The Company has combined Yahoo! Inc.’s operating assets with its existing AOL Inc. business to create a new subsidiary, Oath Inc., owns a diverse house of more than 50 media and technology brands. The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, Yahoo Finance and Yahoo Mail.
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