Shaw Communications (NYSE: SJR) and Telus (NYSE:TU) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.
Volatility and Risk
Shaw Communications has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Telus has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.
Institutional & Insider Ownership
54.0% of Shaw Communications shares are held by institutional investors. Comparatively, 51.8% of Telus shares are held by institutional investors. 1.0% of Shaw Communications shares are held 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.
Shaw Communications pays an annual dividend of $0.95 per share and has a dividend yield of 5.1%. Telus pays an annual dividend of $1.61 per share and has a dividend yield of 4.6%. Shaw Communications pays out 68.8% of its earnings in the form of a dividend. Telus pays out 85.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telus has raised its dividend for 2 consecutive years. Shaw Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Shaw Communications and Telus’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations and price targets for Shaw Communications and Telus, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Shaw Communications presently has a consensus target price of $27.33, indicating a potential upside of 46.95%. Telus has a consensus target price of $46.17, indicating a potential upside of 31.79%. Given Shaw Communications’ higher probable upside, analysts plainly believe Shaw Communications is more favorable than Telus.
Earnings and Valuation
This table compares Shaw Communications and Telus’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Shaw Communications||$3.70 billion||2.40||$644.63 million||$1.38||13.48|
|Telus||$10.26 billion||2.03||$1.13 billion||$1.89||18.53|
Telus has higher revenue and earnings than Shaw Communications. Shaw Communications is trading at a lower price-to-earnings ratio than Telus, indicating that it is currently the more affordable of the two stocks.
Telus beats Shaw Communications on 9 of the 17 factors compared between the two stocks.
About Shaw Communications
Shaw Communications Inc. (Shaw) is a diversified connectivity provider. The Company operates through four divisions: Consumer, Wireless, Business Network Services and Business Infrastructure Services. Under the Consumer division, the Company offers Cable telecommunications and Satellite video services to residential customers. Its Business Network Services division offers data networking, Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities. Its Business Infrastructure Services division offers data center colocation, cloud technology and managed information technology (IT) solutions to businesses. The Company offers wireless services for voice and data communications through its Wireless division. Its wireline services offer approximately 120 high definition (HD) channels and over 10,000 on-demand, pay-per-view and subscription movie and television programming titles.
TELUS Corporation, together with its subsidiaries, provides a range of telecommunications products and services in Canada. It operates through Wireless and Wireline segments. The company's telecommunications products and services comprise wireless and wireline voice and data services; data services, including Internet protocol; television services; hosting, managed information technology, and security and cloud-based services; healthcare solutions; business process outsourcing; and security solutions. It has 13 million subscriber connections, including 8.9 million wireless subscribers, 1.7 million high-speed Internet subscribers, 1.3 million wireline residential network access lines, and 1.1 million TELUS TV subscribers. The company was formerly known as TELUS Communications Inc. and changed its name to TELUS Corporation in February 2005. TELUS Corporation was founded in 1993 and is based in Vancouver, Canada.
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