Analyzing Freenet (OTCMKTS:FRTAF) and SurgePays (NASDAQ:SURG)

SurgePays (NASDAQ:SURG) and Freenet (OTCMKTS:FRTAF) are both communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Profitability

This table compares SurgePays and Freenet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SurgePays	-47.89%	N/A	-274.37%
Freenet	10.04%	17.88%	7.85%

Volatility & Risk

SurgePays has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, Freenet has a beta of -0.01, indicating that its share price is 101% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for SurgePays and Freenet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SurgePays	1	1	1	0	2.00
Freenet	0	2	1	1	2.75

SurgePays presently has a consensus price target of $3.50, indicating a potential upside of 2,139.28%. Given SurgePays’ higher probable upside, equities analysts plainly believe SurgePays is more favorable than Freenet.

Valuation and Earnings

This table compares SurgePays and Freenet”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SurgePays	$56.96 million	0.15	-$36.07 million	($1.53)	-0.10
Freenet	$2.76 billion	1.16	$306.95 million	$2.56	10.55

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

Institutional & Insider Ownership

6.9% of SurgePays shares are owned by institutional investors. 29.1% of SurgePays shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Freenet beats SurgePays on 10 of the 14 factors compared between the two stocks.

About SurgePays

SurgePays, Inc., together with its subsidiaries, operates as a financial technology and telecom company in the United States. It operates through three segments: Mobile Virtual Network Operators, Comprehensive Platform Services, and Lead Generation. The company offers subsidized and non-subsidized mobile virtual network operators for internet connectivity through mobile broadband services to consumers; ACH banking relationships and fintech transactions platform to convenience stores; wireless top-up transactions and wireless product aggregation; and lead generation and case management solutions primarily to law firms in the mass tort industry, as well as call center activities. SurgePays, Inc. is headquartered in Bartlett, Tennessee.

About Freenet

freenet AG provides telecommunications, broadcasting, and multimedia services for mobile communications/mobile internet, and digital lifestyle sectors in Germany. It operates through Mobile Communications, TV and Media, and Other/Holding segments. The Mobile Communications segment engages in the marketing of mobile communications services, which include voice and data services from the mobile network operators; planning, set up, installation, and maintenance services for WiFi networks; and selling and distribution of mobile devices, as well as offers additional services for mobile data communications and digital lifestyle. This segment also provides network-independent services and tariffs; tariffs of the network operators on the basis of the network operator contracts; and freenet Internet, an app-based Internet product. The TV and Media segment is involved in the planning, project management, construction, operation, service, and marketing services for broadcast-related solutions for business clients in the broadcasting and media sectors; and the provision of services to end users in the field of DVB-T2 and IPTV. The Other/Holding segment offers portal services, such as e-commerce/advertising services; payment services; various digital products and entertainment formats for downloading and displaying, as well as use on mobile devices; communication development solutions, IT services, and other services; narrowband voice services; data services; and distribution services. The company provides its services under the klarmobil.de, freenetmobile.de, Dr.SIM, freenet MOBILE, FUNK, freenet FLEX, freenet, freenet TV, waipu.tv, freenet VIDEO, freenet.de, freenet BASICS, freenet ENERGY, freenet BUSINESS, CARMADA, MEDIA BROADCAST, vitrado.de, and The Cloud brands. It sells its products through electronics stores, as well as online sales. freenet AG was incorporated in 2005 and is headquartered in Büdelsdorf, Germany.