Otelco (NASDAQ:OTEL) and Telefonica (NYSE:TEF) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Volatility and Risk

Otelco has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Telefonica has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Insider & Institutional Ownership

10.8% of Otelco shares are held by institutional investors. Comparatively, 0.9% of Telefonica shares are held by institutional investors. 4.6% of Otelco shares are held by insiders. Comparatively, 0.0% of Telefonica shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Otelco and Telefonica, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Otelco 0 0 0 0 N/A
Telefonica 0 4 5 0 2.56

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Otelco $66.07 million 0.48 $9.47 million N/A N/A
Telefonica $57.51 billion 0.61 $3.93 billion $0.95 7.08

Telefonica has higher revenue and earnings than Otelco.

Profitability

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

Net Margins Return on Equity Return on Assets
Otelco 12.71% 58.03% 6.88%
Telefonica 4.03% 14.38% 3.18%

Summary

Otelco beats Telefonica on 6 of the 11 factors compared between the two stocks.

Otelco Company Profile

Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. The company offers local services, including voice lines that provide local dial tone and calling features, such as caller identification, call waiting, call forwarding, and voicemail; long distance services; billing and collection services for other carriers under contract; and directory advertising services. It also provides network access services comprising the origination, transportation, and termination of calls of long distance, wireless, and other interexchange carriers; digital high-speed data lines and ancillary services, such as Web hosting and computer virus protection; and basic, digital, high-definition, digital video recording, video on demand, and pay per view cable television services. In addition, it offers Internet protocol television; wireless security systems and system monitoring services; and private/hybrid cloud hosting services, as well as consulting and professional IT engineering services for mission-critical software applications for small and mid-sized companies. Further, the company rents fiber to transport data and other telecommunications services. It primarily serves business and residential customers residing in and adjacent to the exchanges in Alabama, Maine, Massachusetts, Missouri, Vermont, and West Virginia; and business customers in Maine and New Hampshire. As of March 6, 2019, it operated approximately 99,000 voice and data access lines. The company was founded in 1998 and is based in Oneonta, Alabama.

Telefonica Company Profile

Telefónica, S.A. provides mobile and fixed communication services primarily in Europe and Latin America. The company's mobile and related services and products comprise mobile voice, value added, mobile data and Internet, wholesale, corporate, roaming, fixed wireless, and trunking and paging services. Its fixed telecommunication services include PSTN lines; ISDN accesses; public telephone services; local, domestic, and international long-distance and fixed-to-mobile communications; corporate communications; supplementary and business oriented value-added; video telephony; intelligent network; and telephony information services. The company also leases and sells handset equipment, as well as provides Internet and broadband multimedia services comprising Internet service provider; portal and network; retail and wholesale broadband access; narrowband switched access to Internet; high-speed Internet services through fiber to the home; and voice over Internet protocol services. In addition, it offers data and business-solutions services that include leased lines; virtual private network; fiber optics; hosting and application; outsourcing and consultancy; desktop; and system integration and professional services. Further, the company offers wholesale services for telecommunication operators, including domestic interconnection; international wholesale; leased lines for other operators' network deployment; and local loop leasing under the unbundled local loop regulation framework, as well as bit stream services, wholesale line rental accesses, and leased ducts for other operators' fiber deployment. Additionally, it provides Internet protocol television (TV), over-the-top network TV, cable and satellite TV, and pay TV services; M2M connectivity platforms; financial and other payment, security, cloud computing, advertising, big data, and digital telco experience services; and Aura and Movistar Home. The company was founded in 1924 and is headquartered in Madrid, Spain.

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