Spirent Communications (OTCMKTS:SPMYY) and Telefonica Brasil (NYSE:VIV) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.
This table compares Spirent Communications and Telefonica Brasil’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and price targets for Spirent Communications and Telefonica Brasil, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Telefonica Brasil has a consensus price target of $14.17, suggesting a potential upside of 22.34%. Given Telefonica Brasil’s higher probable upside, analysts clearly believe Telefonica Brasil is more favorable than Spirent Communications.
Spirent Communications pays an annual dividend of $0.19 per share and has a dividend yield of 2.3%. Telefonica Brasil pays an annual dividend of $0.30 per share and has a dividend yield of 2.6%. Spirent Communications pays out 44.2% of its earnings in the form of a dividend. Telefonica Brasil pays out 21.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Telefonica Brasil is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
Spirent Communications has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Telefonica Brasil has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.
Earnings and Valuation
This table compares Spirent Communications and Telefonica Brasil’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Spirent Communications||$476.90 million||N/A||$55.80 million||$0.43||19.63|
|Telefonica Brasil||$11.41 billion||1.71||$2.44 billion||$1.39||8.33|
Telefonica Brasil has higher revenue and earnings than Spirent Communications. Telefonica Brasil is trading at a lower price-to-earnings ratio than Spirent Communications, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
10.0% of Telefonica Brasil shares are owned by institutional investors. 1.0% of Spirent Communications shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Telefonica Brasil beats Spirent Communications on 11 of the 14 factors compared between the two stocks.
About Spirent Communications
Spirent Communications plc provides solutions to develop devices and equipment and to operate networks worldwide. The company operates through three segments: Networks & Security, Lifecycle Service Assurance, and Connected Devices. The Networks & Security segment develops performance and security test systems to accelerate the development of new devices, networks, and applications for high-speed Ethernet/IP, mobile, and global satellite navigation systems. The Lifecycle Service Assurance segment develops active test and analytics solutions for service turn-up, network performance improvement, and customer experience management. The Connected Devices develops automated test systems; and offers services to test new devices in the lab or on networks. The company was formerly known as Spirent plc and changed its name to Spirent Communications plc in May 2006. Spirent Communications plc was founded in 1936 and is headquartered in Crawley, the United Kingdom.
About Telefonica Brasil
Telefônica Brasil S.A. provides mobile and fixed telecommunications services to residential and corporate customers in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband Internet access through 3G, 4G, and 4.5G, as well as mobile value-added services and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through direct to home satellite technology, IPTV, and cable, as well as pay-per-view and video on demand services; network services, such as rental of facilities; other services comprising Internet access, private network connectivity, computer equipment leasing, extended, caller identification, voice mail, cellular blocker, and others; wholesale services, including interconnection services to users of other network providers; and digital services, such as entertainment, cloud, and financial services. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices, such as smartphones, broadband USB modems, and other devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, manufacturing, services, financial institutions, government, etc. Telefônica Brasil S.A. markets and sells its solutions through own stores, dealers, retail and distribution channels, door-to-door sales, and telesales. The company was formerly known as Telecomunicações de São Paulo S.A. – TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil. Telefônica Brasil S.A. is a subsidiary of SP Telecomunicações Participações Ltda.
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