IDT (NYSE: IDT) and Telefonica (NYSE:TEF) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a summary of current ratings for IDT and Telefonica, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IDT 0 0 0 0 N/A
Telefonica 1 3 5 0 2.44

Telefonica has a consensus price target of $11.40, suggesting a potential upside of 17.28%. Given Telefonica’s higher possible upside, analysts clearly believe Telefonica is more favorable than IDT.

Profitability

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

Net Margins Return on Equity Return on Assets
IDT -1.03% 7.53% 2.31%
Telefonica 4.95% 29.25% 6.62%

Dividends

IDT pays an annual dividend of $0.76 per share and has a dividend yield of 7.4%. Telefonica pays an annual dividend of $0.35 per share and has a dividend yield of 3.6%. IDT pays out -115.2% of its earnings in the form of a dividend. Telefonica pays out 70.0% 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. IDT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

52.7% of IDT shares are owned by institutional investors. Comparatively, 0.9% of Telefonica shares are owned by institutional investors. 21.8% of IDT shares are owned by company insiders. Comparatively, 0.0% of Telefonica shares are owned 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.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IDT $1.50 billion 0.17 $8.17 million ($0.66) -15.48
Telefonica $57.59 billion 0.85 $2.62 billion $0.50 19.44

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

Volatility & Risk

IDT has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Telefonica has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Summary

Telefonica beats IDT on 11 of the 15 factors compared between the two stocks.

IDT 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.

Telefonica Company Profile

Telefonica, S.A. is an integrated and diversified telecommunications group operating in Europe and Latin America. The Company’s services and products include Mobile business, Fixed-line telephony business and Digital services. Its segments include Telefonica Spain, Telefonica Brazil, Telefonica Germany, Telefonica United Kingdom and Telefonica Hispanoamerica (formed by the Company’s operators in Argentina, Chile, Peru, Colombia, Mexico, Venezuela and Central America, Ecuador and Uruguay). These segments are engaged in activities relating to wireline, wireless, cable, data, Internet and television (TV) businesses and other digital services in accordance with each location. It offers a range of mobile and related services and products to personal and business customers. It offers traditional fixed telecommunication services, Internet and broadband multimedia services and data and business-solutions services. It offers a range of digital services, such as Internet of Things (IoT).

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