TELUS Corporation (NYSE: TU) and Cincinnati Bell (NYSE:CBB) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Profitability

This table compares TELUS Corporation and Cincinnati Bell’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TELUS Corporation 9.55% 18.75% 5.44%
Cincinnati Bell 6.84% -3.87% 0.70%

Analyst Ratings

This is a summary of recent ratings and recommmendations for TELUS Corporation and Cincinnati Bell, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TELUS Corporation 0 0 5 0 3.00
Cincinnati Bell 2 2 1 0 1.80

TELUS Corporation currently has a consensus target price of $45.00, suggesting a potential upside of 25.42%. Cincinnati Bell has a consensus target price of $23.50, suggesting a potential upside of 16.05%. Given TELUS Corporation’s stronger consensus rating and higher probable upside, equities research analysts clearly believe TELUS Corporation is more favorable than Cincinnati Bell.

Institutional and Insider Ownership

50.8% of TELUS Corporation shares are owned by institutional investors. Comparatively, 85.2% of Cincinnati Bell shares are owned by institutional investors. 1.4% of Cincinnati Bell shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares TELUS Corporation and Cincinnati Bell’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TELUS Corporation $10.66 billion 2.00 $3.37 billion $1.58 22.71
Cincinnati Bell $1.17 billion 0.73 $282.90 million $1.65 12.27

TELUS Corporation has higher revenue and earnings than Cincinnati Bell. Cincinnati Bell is trading at a lower price-to-earnings ratio than TELUS Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

TELUS Corporation pays an annual dividend of $1.58 per share and has a dividend yield of 4.4%. Cincinnati Bell does not pay a dividend. TELUS Corporation pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

TELUS Corporation has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Cincinnati Bell has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.

Summary

TELUS Corporation beats Cincinnati Bell on 10 of the 16 factors compared between the two stocks.

TELUS Corporation Company Profile

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.

Cincinnati Bell Company Profile

Cincinnati Bell Inc., along with its subsidiaries, provides diversified telecommunications and technology services. The Company operates through two segments: Entertainment and Communications, and IT Services and Hardware. Through its Entertainment and Communications segment, the Company provides high-speed data, video and voice solutions to consumers and businesses over fiber network and a legacy copper network. The IT Services and Hardware segments operates through its subsidiary, Cincinnati Bell Technology Solutions Inc. (CBTS), which is engaged in the sale and service of end-to-end communications and information technology (IT) systems and solutions for business customers across the United States. The Company has interest in CyrusOne Inc., which operates carrier-neutral data center colocation business.

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