IDT Corporation (NYSE: IDT) and CenturyLink (NYSE:CTL) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Risk and Volatility

IDT Corporation has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, CenturyLink has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.

Dividends

IDT Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 5.6%. CenturyLink pays an annual dividend of $2.16 per share and has a dividend yield of 10.9%. IDT Corporation pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CenturyLink pays out 313.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for IDT Corporation and CenturyLink, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IDT Corporation 0 0 0 0 N/A
CenturyLink 3 7 4 0 2.07

CenturyLink has a consensus price target of $24.67, indicating a potential upside of 24.83%. Given CenturyLink’s higher probable upside, analysts clearly believe CenturyLink is more favorable than IDT Corporation.

Valuation and Earnings

This table compares IDT Corporation and CenturyLink’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IDT Corporation $1.50 billion 0.22 $27.32 million $0.38 35.58
CenturyLink $16.97 billion 0.64 $6.06 billion $0.69 28.64

CenturyLink has higher revenue and earnings than IDT Corporation. CenturyLink is trading at a lower price-to-earnings ratio than IDT Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares IDT Corporation and CenturyLink’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IDT Corporation 0.55% 14.44% 4.56%
CenturyLink 2.20% 8.43% 2.36%

Insider & Institutional Ownership

52.0% of IDT Corporation shares are held by institutional investors. Comparatively, 83.0% of CenturyLink shares are held by institutional investors. 12.8% of IDT Corporation shares are held by company insiders. Comparatively, 0.6% of CenturyLink shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

CenturyLink beats IDT Corporation on 9 of the 15 factors compared between the two stocks.

IDT Corporation Company Profile

IDT Corporation is a holding company with operations primarily in the telecommunications and payment industries. The Company’s segments include Telecom Platform Services, Consumer Phone Services and All Other. The Company’s Telecom Platform Services segment provides retail telecommunications and payment offerings, as well as wholesale international long distance traffic termination. The Telecom Platform Services segment markets and distributes multiple communications and payment services across four businesses: Retail Communications, Wholesale Carrier Services, Payment Services and Hosted Platform Solutions. The Company’s Consumer Phone Services segment provides consumer local and long distance services in certain states of the United States. The Telecom Platform Services and Consumer Phone Services segments comprise the Company’s IDT Telecom division. The All Other segment includes its real estate holdings and other smaller businesses.

CenturyLink Company Profile

CenturyLink, Inc. is an integrated communications company. The Company is engaged in providing an array of communications services to its residential and business customers. Its segments include business, which provides strategic, legacy and data integration products and services to small, medium and enterprise business, wholesale and governmental customers, including other communication providers, and consumer, which provides strategic and legacy products and services to residential customers. Its communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology and other ancillary services. As of December 31, 2016, it served approximately 5.9 million broadband subscribers and 325,000 Prism TV subscribers.

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