FairPoint Communications (NASDAQ: FRP) and Orange SA (NASDAQ:ORAN) are both telecommunications services companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Profitability

This table compares FairPoint Communications and Orange SA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FairPoint Communications -11.81% N/A -7.88%
Orange SA 4.09% 4.47% 1.76%

Institutional & Insider Ownership

88.6% of FairPoint Communications shares are held by institutional investors. 7.6% of FairPoint Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares FairPoint Communications and Orange SA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FairPoint Communications N/A N/A N/A $2.27 7.03
Orange SA $49.41 billion 0.89 $14.60 billion N/A N/A

Orange SA has higher revenue and earnings than FairPoint Communications.

Analyst Recommendations

This is a summary of recent ratings and target prices for FairPoint Communications and Orange SA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FairPoint Communications 0 1 0 0 2.00
Orange SA 2 1 3 0 2.17

FairPoint Communications presently has a consensus target price of $17.00, suggesting a potential upside of 6.58%. Orange SA has a consensus target price of $16.00, suggesting a potential downside of 3.09%. Given FairPoint Communications’ higher probable upside, analysts plainly believe FairPoint Communications is more favorable than Orange SA.

Summary

Orange SA beats FairPoint Communications on 6 of the 9 factors compared between the two stocks.

About FairPoint Communications

FairPoint Communications, Inc. is a provider of data, voice and communications services to business, wholesale and residential customers within its service territories. The Company offers its customers a suite of services, such as Ethernet, Session Initiation Protocol Trunking (SIP-Trunking), hosted Primary Branch Exchange (hosted PBX), managed services, data center colocation services, high capacity data transport and other Internet protocol (IP)-based services over its fiber-based network. It also offers Internet access, high-speed data, and local and long distance voice services. It provides services, such as Data and Internet Services, which include optical, Ethernet, Ethernet virtual circuit technology for cellular backhaul and private line special access services. It offers Voice Services, which include Local Calling Services, Long Distance Services and 9-1-1 Services. It also offers Network Transport Services, Interstate Access Charges and Intrastate Access Charges.

About Orange SA

Orange SA is a telecommunications operator. The Company also provides telecommunication services to multinational companies, under the brand Orange Business Services. The Company’s segments include France, Spain, Poland, Belgium and Luxembourg, Central European countries, Africa and Middle East, Enterprise, and International Carriers & Shared Services. The Company provides consumers, businesses and other telecommunications operators with a range of services, including fixed telephony and mobile telecommunications, data transmission and other value-added services, mainly in Europe, Africa and the Middle East. The Company offers fixed-line telephony, mobile telephony and Internet services in France. The Company offers fixed-line telephony, mobile telephony and Internet services in Spain. The Company offers fixed-line and mobile telephony, and Internet services in Poland. The Company operates through Mobistar and Groupama Banque SA.

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