Consolidated Communications (OTCMKTS: SFTBY) and SoftBank Group (OTCMKTS:SFTBY) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Profitability

This table compares Consolidated Communications and SoftBank Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Consolidated Communications 3.47% -3.15% -0.45%
SoftBank Group 11.12% 18.44% 3.74%

Valuation & Earnings

This table compares Consolidated Communications and SoftBank Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Consolidated Communications $1.06 billion 0.86 $64.94 million $0.26 49.31
SoftBank Group $82.70 billion 1.20 $9.38 billion $4.10 11.11

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

Institutional & Insider Ownership

71.3% of Consolidated Communications shares are held by institutional investors. Comparatively, 1.2% of SoftBank Group shares are held by institutional investors. 2.4% of Consolidated Communications shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Consolidated Communications and SoftBank Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Consolidated Communications 0 3 1 0 2.25
SoftBank Group 0 0 3 0 3.00

Consolidated Communications presently has a consensus target price of $14.67, indicating a potential upside of 14.40%. SoftBank Group has a consensus target price of $53.00, indicating a potential upside of 16.36%. Given SoftBank Group’s stronger consensus rating and higher probable upside, analysts clearly believe SoftBank Group is more favorable than Consolidated Communications.

Risk and Volatility

Consolidated Communications has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, SoftBank Group has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500.

Dividends

Consolidated Communications pays an annual dividend of $1.55 per share and has a dividend yield of 12.1%. SoftBank Group pays an annual dividend of $0.14 per share and has a dividend yield of 0.3%. Consolidated Communications pays out 596.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SoftBank Group pays out 3.4% of its earnings in the form of a dividend.

Summary

SoftBank Group beats Consolidated Communications on 12 of the 16 factors compared between the two stocks.

About Consolidated Communications

Consolidated Communications Holdings, Inc., through its subsidiaries, provides various integrated communications services to business and residential customers in the United States. It offers a range of communication services and products that include local and long-distance, high-speed broadband Internet access, video, voice over Internet protocol, private line, custom calling features, security, cloud, data center, managed and IT, and directory publishing services, as well as engages in equipment sales activities. The company also sells and supports telecommunications equipment, such as key, private branch exchange, IP-based telephone systems, and other hardware solutions, as well as offers support services to medium and large business customers. As of December 31, 2017, it had approximately 972 thousand voice connections, 784 thousand data connections, and 103 thousand video connections. The company serves customers in consumer, commercial, and carrier channels. Consolidated Communications Holdings, Inc. was founded in 1894 and is headquartered in Mattoon, Illinois.

About SoftBank Group

SoftBank Group Corp., together with its subsidiaries, operates in the information industry in Japan and internationally. The company operates through six segments: Domestic Telecommunications, Sprint, Yahoo Japan, Distribution, ARM, and SoftBank Vision Fund and Delta Fund. The Domestic Telecommunications segment provides mobile communications and broadband services; and telecom services, such as data communications and fixed-line telephone services to corporate customers, as well as sells mobile devices. The Sprint segment offers mobile communications and fixed-line telecommunications services; and leases and sells mobile devices and accessories. The Yahoo Japan segment is involved in Internet advertising, e-commerce, and membership service businesses. The Distribution segment distributes mobile devices; and sells PC software, peripherals, and mobile device accessories. The ARM segment designs microprocessor intellectual property and related technology; and sells software tools. The SoftBank Vision Fund and Delta Fund segment is involved in investment activities. Further, the company operates professional baseball team, as well as manages and maintains baseball stadium and other sports facilities; provides visual, audio, and data content distribution services; generates, supplies, and sells electricity from renewable energy sources; operates IT information site; offers solutions and services for online businesses; and operates software site, through which it conducts an online game business for mobile phones and PCs, as well as engages in robotics planning, development, and marketing activities. SoftBank Group Corp. was formerly known as SoftBank Corp. and changed its name to SoftBank Group Corp. in July 2015. The company was founded in 1981 and is headquartered in Tokyo, Japan.

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