InfraREIT (NYSE: HIFR) and Communications Sales & Leasing,Inc. (NASDAQ:UNIT) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, risk, earnings, dividends, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares InfraREIT and Communications Sales & Leasing,Inc.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InfraREIT 28.31% 6.28% 3.13%
Communications Sales & Leasing,Inc. -5.41% N/A -1.29%

Earnings and Valuation

This table compares InfraREIT and Communications Sales & Leasing,Inc.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
InfraREIT $184.70 million 5.27 $160.52 million $1.20 18.53
Communications Sales & Leasing,Inc. $831.65 million 3.48 $681.10 million ($0.32) -51.59

Communications Sales & Leasing,Inc. has higher revenue and earnings than InfraREIT. Communications Sales & Leasing,Inc. is trading at a lower price-to-earnings ratio than InfraREIT, indicating that it is currently the more affordable of the two stocks.

Dividends

InfraREIT pays an annual dividend of $1.00 per share and has a dividend yield of 4.5%. Communications Sales & Leasing,Inc. pays an annual dividend of $2.40 per share and has a dividend yield of 14.5%. InfraREIT pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Communications Sales & Leasing,Inc. pays out -750.0% of its earnings in the form of a dividend. Communications Sales & Leasing,Inc. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

InfraREIT has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Communications Sales & Leasing,Inc. has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Insider and Institutional Ownership

83.8% of InfraREIT shares are owned by institutional investors. Comparatively, 68.2% of Communications Sales & Leasing,Inc. shares are owned by institutional investors. 28.0% of InfraREIT shares are owned by insiders. Comparatively, 0.4% of Communications Sales & Leasing,Inc. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for InfraREIT and Communications Sales & Leasing,Inc., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InfraREIT 0 2 1 0 2.33
Communications Sales & Leasing,Inc. 0 1 8 1 3.00

InfraREIT presently has a consensus price target of $22.00, suggesting a potential downside of 1.03%. Communications Sales & Leasing,Inc. has a consensus price target of $30.25, suggesting a potential upside of 83.22%. Given Communications Sales & Leasing,Inc.’s stronger consensus rating and higher possible upside, analysts plainly believe Communications Sales & Leasing,Inc. is more favorable than InfraREIT.

Summary

Communications Sales & Leasing,Inc. beats InfraREIT on 9 of the 16 factors compared between the two stocks.

About InfraREIT

InfraREIT, Inc. is a real estate investment trust. The Company is engaged in owning and leasing rate-regulated transmission and distribution (T&D) assets in Texas. It leases its T&D assets to Sharyland Utilities, L.P. Its assets are located in the Texas Panhandle near Amarillo, the Permian Basin in and around Stanton, Central Texas around Brady, Northeast Texas in and around Celeste and South Texas near McAllen. As of December 31, 2016, its T&D assets consisted of approximately 54,000 electricity delivery points, approximately 815 circuit miles of transmission lines, approximately 40,500 circuit miles of distribution lines, 57 substations and a 300 megawatt high-voltage direct current (DC) Tie between Texas and Mexico (Railroad DC Tie). As of December 31, 2016, its T&D assets in each of its leases included S/B/C Lease, McAllen Lease, competitive renewable energy zone (CREZ) Lease, Stanton Transmission Loop Lease and Electric Reliability Council of Texas (ERCOT) Transmission Lease.

About Communications Sales & Leasing,Inc.

Uniti Group Inc., formerly Communications Sales & Leasing, Inc., is an internally managed real estate investment trust engaged in the acquisition and construction of infrastructure in the communications industry. The Company focuses on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. It operates in four segments: Leasing, Fiber Infrastructure, Towers and Consumer Competitive Local Exchange Carrier (Consumer CLEC). The Leasing segment includes Uniti Leasing. The Fiber Infrastructure segment includes Uniti Fiber business. The Towers segment includes Uniti Towers and its ground lease investments. The Consumer CLEC segment includes Talk America. As of July 3, 2017, the Company and its subsidiaries owned approximately 88,100 fiber network route miles, representing approximately 4.8 million fiber strand miles and approximately 231,900 route miles of copper cable lines across 32 states.

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