Analyzing Oi SA (NYSE:OIBR) and CenturyLink (CTL)

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

Insider and Institutional Ownership

83.0% of CenturyLink shares are held by institutional investors. 0.6% of CenturyLink shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

CenturyLink pays an annual dividend of $2.16 per share and has a dividend yield of 11.4%. Oi SA does not pay a dividend. 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 breakdown of current ratings and price targets for Oi SA and CenturyLink, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oi SA 0 0 0 0 N/A
CenturyLink 3 6 4 0 2.08

CenturyLink has a consensus price target of $25.55, suggesting a potential upside of 34.59%. Given CenturyLink’s higher possible upside, analysts plainly believe CenturyLink is more favorable than Oi SA.

Earnings and Valuation

This table compares Oi SA and CenturyLink’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Oi SA N/A N/A N/A N/A N/A
CenturyLink $16.97 billion 0.61 $6.06 billion $0.69 27.51

CenturyLink has higher revenue and earnings than Oi SA.

Profitability

This table compares Oi SA and CenturyLink’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oi SA -24.34% -49.64% -7.06%
CenturyLink 2.20% 8.43% 2.36%

Summary

CenturyLink beats Oi SA on 9 of the 10 factors compared between the two stocks.

About Oi SA

Oi S.A. is an integrated telecommunications service provider in Brazil. The Company is a switched fixed-line telephony services (STFC) concessionaire. It is engaged in the provision of STFC as a local and intraregional long-distance carrier. Its segments include Residential Services, Personal Mobility, and SMEs/Corporate. It offers a range of integrated telecommunications services that include fixed and mobile, broadband, pay television (TV), data transmission and Internet provider services. The Company’s Residential Services segment is focused on the sale of fixed telephony services, including voice services, data communication services (broadband), and pay TV. The Personal Mobility segment is focused on the sale of mobile telephony services to subscription and prepaid customers, and mobile broadband customer. The SMEs/Corporate segment includes corporate solutions offered to its small, medium-sized, and large corporate customers.

About CenturyLink

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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