Financial Analysis: Cincinnati Bell (NYSE:CBB) vs. Neustar (NSR)

Cincinnati Bell (NYSE: CBB) and Neustar (NYSE:NSR) are both small-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Earnings & Valuation

This table compares Cincinnati Bell and Neustar’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cincinnati Bell $1.19 billion 0.75 $102.10 million $0.94 22.34
Neustar N/A N/A N/A $3.27 10.24

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

Institutional and Insider Ownership

84.2% of Cincinnati Bell shares are held by institutional investors. Comparatively, 88.8% of Neustar shares are held by institutional investors. 1.4% of Cincinnati Bell shares are held by company insiders. Comparatively, 2.9% of Neustar shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Cincinnati Bell and Neustar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cincinnati Bell 4.13% -2.69% 0.46%
Neustar 15.50% 19.28% 8.80%

Analyst Ratings

This is a breakdown of current ratings for Cincinnati Bell and Neustar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cincinnati Bell 2 2 0 0 1.50
Neustar 0 2 0 0 2.00

Cincinnati Bell currently has a consensus price target of $24.00, suggesting a potential upside of 14.29%. Neustar has a consensus price target of $29.00, suggesting a potential downside of 13.43%. Given Cincinnati Bell’s higher probable upside, analysts plainly believe Cincinnati Bell is more favorable than Neustar.

Summary

Neustar beats Cincinnati Bell on 7 of the 9 factors compared between the two stocks.

About Cincinnati Bell

Cincinnati Bell Inc., along with its subsidiaries, provides diversified telecommunications and technology services. The Company operates through two segments: Entertainment and Communications, and IT Services and Hardware. Through its Entertainment and Communications segment, the Company provides high-speed data, video and voice solutions to consumers and businesses over fiber network and a legacy copper network. The IT Services and Hardware segments operates through its subsidiary, Cincinnati Bell Technology Solutions Inc. (CBTS), which is engaged in the sale and service of end-to-end communications and information technology (IT) systems and solutions for business customers across the United States. The Company has interest in CyrusOne Inc., which operates carrier-neutral data center colocation business.

About Neustar

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

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