BT Group PLC (NYSE: BT) and Neustar (NYSE:NSR) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitabiliy, analyst recommendations and earnings.

Analyst Ratings

This is a summary of recent ratings and target prices for BT Group PLC and Neustar, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BT Group PLC 3 7 8 0 2.28
Neustar 0 3 0 0 2.00

BT Group PLC presently has a consensus price target of $357.94, suggesting a potential upside of 1,611.82%. Neustar has a consensus price target of $29.50, suggesting a potential downside of 11.94%. Given BT Group PLC’s stronger consensus rating and higher possible upside, research analysts plainly believe BT Group PLC is more favorable than Neustar.

Profitability

This table compares BT Group PLC and Neustar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BT Group PLC 7.14% 40.09% 6.79%
Neustar 15.03% 32.93% 13.97%

Dividends

BT Group PLC pays an annual dividend of $0.90 per share and has a dividend yield of 4.3%. Neustar does not pay a dividend. BT Group PLC pays out 86.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Neustar has raised its dividend for 5 consecutive years.

Insider & Institutional Ownership

1.0% of BT Group PLC shares are held by institutional investors. Comparatively, 88.8% of Neustar shares are held by institutional investors. 2.9% of Neustar shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

BT Group PLC has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Neustar has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Valuation & Earnings

This table compares BT Group PLC and Neustar’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BT Group PLC $31.28 billion 1.33 $8.89 billion $1.04 20.11
Neustar $1.22 billion 1.53 $473.09 million $3.27 10.24

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

Summary

Neustar beats BT Group PLC on 9 of the 17 factors compared between the two stocks.

BT Group PLC Company Profile

BT Group plc is a communications services company. The Company is engaged in selling fixed-voice services, broadband, mobile and television products and services, as well as managed networked information technology (IT) solutions and cyber security protection. Its segments include Consumer, which provides fixed-voice, broadband, TV and mobile services; EE, which is a mobile network operator in the United Kingdom and provides mobile and fixed communications services to consumers; Business and Public Sector, which provides communications and IT services to businesses and the public sector in the United Kingdom and the Republic of Ireland (RoI) ;Global Services, which provides managed networked IT services to corporate customers; Wholesale and Ventures, which provides fixed and mobile services to communications providers (CPs); and Openreach, which provides copper and fiber connections between its exchanges and homes and businesses.

Neustar Company Profile

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

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