Analyzing Telecom Italia S.P.A. (NYSE:TI) and Orange SA (ORAN)

Orange SA (NASDAQ: ORAN) and Telecom Italia S.P.A. (NYSE:TI) are both large-cap integrated telecommunications services – nec companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Earnings and Valuation

This table compares Orange SA and Telecom Italia S.P.A.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Orange SA N/A N/A N/A $0.20 82.20
Telecom Italia S.P.A. $21.06 billion 0.81 $2.00 billion $0.66 12.21

Telecom Italia S.P.A. has higher revenue and earnings than Orange SA. Telecom Italia S.P.A. is trading at a lower price-to-earnings ratio than Orange SA, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Orange SA has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500. Comparatively, Telecom Italia S.P.A. has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Profitability

This table compares Orange SA and Telecom Italia S.P.A.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orange SA 4.09% 4.47% 1.76%
Telecom Italia S.P.A. N/A N/A N/A

Analyst Ratings

This is a summary of current recommendations for Orange SA and Telecom Italia S.P.A., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orange SA 2 0 2 0 2.00
Telecom Italia S.P.A. 0 3 2 0 2.40

Telecom Italia S.P.A. has a consensus price target of $1.80, indicating a potential downside of 77.67%. Given Telecom Italia S.P.A.’s stronger consensus rating and higher possible upside, analysts plainly believe Telecom Italia S.P.A. is more favorable than Orange SA.

Institutional and Insider Ownership

0.8% of Telecom Italia S.P.A. shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Telecom Italia S.P.A. beats Orange SA on 6 of the 9 factors compared between the two stocks.

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.

About Telecom Italia S.P.A.

Telecom Italia S.p.A. (Telecom Italia) operates fixed voice and data infrastructure in Italy, and provides mobile network platforms. The Company focuses on various areas of digital services, including Enriched Communication, Trusted Digital Life, Business Life, Indoor Life, Mobile Open Life and Digital Entertainment. Its segments include Consumer, Business, National Wholesale and Other. It is engaged in developing various projects in areas, including Smart Green, Social Reading, Solutions for good schooling, Digital tourism 2.0, Smart Home, FriendTV and Big Data. Smart Green is the assessment of projects connected with the environment and potential partnerships with the local government offices for the monitoring of air in public offices and urban areas, using networks of sensors connected to the Company’s Cloud. The Company is involved, either alone or in partnership with external partners, in devising and developing healthcare services at national, regional and local level.

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