Verizon Communications (NYSE: VZ) and Black Box Corporation (NASDAQ:BBOX) are both integrated telecommunications services – nec companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Insider & Institutional Ownership
62.1% of Verizon Communications shares are held by institutional investors. Comparatively, 91.1% of Black Box Corporation shares are held by institutional investors. 0.1% of Verizon Communications shares are held by insiders. Comparatively, 3.7% of Black Box Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a summary of recent recommendations and price targets for Verizon Communications and Black Box Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Black Box Corporation||0||1||0||0||2.00|
Verizon Communications presently has a consensus price target of $52.43, suggesting a potential upside of 18.58%. Black Box Corporation has a consensus price target of $10.00, suggesting a potential upside of 238.98%. Given Black Box Corporation’s higher probable upside, analysts clearly believe Black Box Corporation is more favorable than Verizon Communications.
Risk and Volatility
Verizon Communications has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Black Box Corporation has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.
Verizon Communications pays an annual dividend of $2.36 per share and has a dividend yield of 5.3%. Black Box Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 16.3%. Verizon Communications pays out 60.5% of its earnings in the form of a dividend. Black Box Corporation pays out -33.6% 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. Black Box Corporation has increased its dividend for 10 consecutive years. Black Box Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Verizon Communications and Black Box Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Black Box Corporation||-2.69%||-2.71%||-0.86%|
Earnings and Valuation
This table compares Verizon Communications and Black Box Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Verizon Communications||$125.98 billion||1.43||$13.13 billion||$3.90||11.34|
|Black Box Corporation||$855.70 million||0.05||-$7.05 million||($1.43)||-2.06|
Verizon Communications has higher revenue and earnings than Black Box Corporation. Black Box Corporation is trading at a lower price-to-earnings ratio than Verizon Communications, indicating that it is currently the more affordable of the two stocks.
Verizon Communications beats Black Box Corporation on 9 of the 16 factors compared between the two stocks.
About Verizon Communications
Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales, to consumer, business and government customers across the United States. The Wireline segment offers voice, data and video communications products and services, such as broadband video, data center and cloud services, security and managed network services, and local and long distance voice services. The Company has combined Yahoo! Inc.’s operating assets with its existing AOL Inc. business to create a new subsidiary, Oath Inc., owns a diverse house of more than 50 media and technology brands. The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, Yahoo Finance and Yahoo Mail.
About Black Box Corporation
Black Box Corporation is a technology solutions provider. The Company is engaged in designing, building, managing and securing the information technology (IT) infrastructure. Offerings under the Company’s Products platform include IT infrastructure, specialty networking, multimedia and keyboard/video/mouse (KVM) switching. Offerings under its Services platform include unified communications, data infrastructure and managed services. It conducts business globally and manages its business on a geographic-service type basis consisting of four segments: North America Products, North America Services, International Products and International Services. The offerings of its Products platform are distributed through value-added resellers, direct marketing manufacturers, mass merchandisers, Web retailers and others. The offerings of its Services platform are distributed through value-added resellers, manufacturers and large system integrators, among others.
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