BCE (NYSE:BCE) and Telstra (OTCMKTS:TLSYY) are both large-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.
BCE pays an annual dividend of $2.32 per share and has a dividend yield of 5.9%. Telstra pays an annual dividend of $0.76 per share and has a dividend yield of 6.9%. BCE pays out 88.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telstra pays out 65.5% of its earnings in the form of a dividend. Telstra is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current recommendations for BCE and Telstra, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
BCE presently has a consensus target price of $57.00, suggesting a potential upside of 45.22%. Given BCE’s higher possible upside, research analysts plainly believe BCE is more favorable than Telstra.
Earnings & Valuation
This table compares BCE and Telstra’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|BCE||$17.52 billion||2.02||$2.25 billion||$2.62||15.01|
|Telstra||$20.17 billion||1.30||$2.76 billion||$1.16||9.53|
Telstra has higher revenue and earnings than BCE. Telstra is trading at a lower price-to-earnings ratio than BCE, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
42.9% of BCE shares are held by institutional investors. Comparatively, 0.1% of Telstra shares are held by institutional investors. 0.2% of BCE shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares BCE and Telstra’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
BCE has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Telstra has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.
BCE beats Telstra on 10 of the 16 factors compared between the two stocks.
BCE Inc., a telecommunications and media company, provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. The company operates through three segments: Bell Wireless, Bell Wireline, and Bell Media. The Bell Wireless segment offers integrated digital wireless voice and data communications products and services. The Bell Wireline segment provides data, including Internet access, Internet protocol TV and telephony, local telephone, and long distance, as well as other communications services and products; and satellite TV and connectivity services. This segment also offers home security and monitoring services; competitive local exchange carrier services; business service solutions, such as hosting and cloud, managed, professional, and infrastructure services; virtual private networks, point-to-point data networks, and international network solutions; and Web and audio conferencing, and email solutions. The Bell Media segment offers conventional, specialty, and pay TV; and digital media, radio broadcasting, and out-of-home advertising services, as well as sports and other event production and broadcasting services. This segment owns and operates approximately 30 conventional TV stations; 34 specialty and 4 pay TV channels; 105 licensed radio stations; 31,000 advertising faces; and 200 Websites and approximately 30 apps. The company also distributes mobile products. BCE Inc. offers its services through a network of corporate and dealer-owned retail stores, national retailers, and call center representatives, as well as Websites and door-to-door sales representatives. The company was formerly known as Bell Canada Enterprises Inc. BCE Inc. was founded in 1880 and is headquartered in Verdun, Canada.
Telstra Corporation Limited, together with its subsidiaries, provides telecommunications and information services to businesses, governments, communities, and individuals in Australia and internationally. It operates in four segments: Telstra Consumer and Small Business, Telstra Enterprise, Telstra Operations, and Telstra Wholesale. The company offers telecommunication products, services, and solutions across mobiles, fixed and mobile broadband, telephony and pay television/Internet protocol, and digital content; and online self-service capabilities, including buying, billing, and servicing requests, as well as operates inbound and outbound call centers, owned and licensed Telstra shops, and the Telstra dealership network. It also provides sales and contract management services for medium to large business and government customers; and product management services for advanced technology solutions and services, such as data and Internet protocol networks, and mobility applications and services, as well as network applications and services products comprising managed network, unified communications, cloud, industry solutions, and integrated services and monitoring. In addition, the company engages in the development of industry vertical solutions; planning, design, engineering architecture, and construction of Telstra networks, technology, and information technology solutions; and provision of a range of telecommunication products and services to other carriers, carriage service providers, and Internet service providers through its networks and related support systems. Further, it provides disconnection, media and marketing, and other services. The company was formerly known as Australian and Overseas Telecommunications Corporation Limited and changed its name to Telstra Corporation Limited in April 1993. Telstra Corporation Limited was founded in 1901 and is based in Melbourne, Australia.
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