Critical Review: WideOpenWest (WOW) & Shaw Communications (SJR)

Shaw Communications (NYSE: SJR) and WideOpenWest (NYSE:WOW) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

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This is a summary of recent ratings and recommmendations for Shaw Communications and WideOpenWest, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shaw Communications 0 1 4 0 2.80
WideOpenWest 0 2 4 1 2.86

Shaw Communications currently has a consensus price target of $27.33, suggesting a potential upside of 30.16%. WideOpenWest has a consensus price target of $19.00, suggesting a potential upside of 169.50%. Given WideOpenWest’s stronger consensus rating and higher possible upside, analysts plainly believe WideOpenWest is more favorable than Shaw Communications.

Dividends

Shaw Communications pays an annual dividend of $0.95 per share and has a dividend yield of 4.5%. WideOpenWest does not pay a dividend. Shaw Communications pays out 113.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

53.1% of Shaw Communications shares are owned by institutional investors. Comparatively, 54.8% of WideOpenWest shares are owned by institutional investors. 1.0% of Shaw Communications shares are owned by company insiders. Comparatively, 2.4% of WideOpenWest shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Shaw Communications and WideOpenWest’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shaw Communications $3.70 billion 2.73 $644.63 million $0.84 25.00
WideOpenWest $1.19 billion 0.53 $159.50 million $0.69 10.22

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

Profitability

This table compares Shaw Communications and WideOpenWest’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shaw Communications 10.97% 11.49% 4.76%
WideOpenWest N/A N/A N/A

Summary

Shaw Communications beats WideOpenWest on 9 of the 15 factors compared between the two stocks.

About Shaw Communications

Shaw Communications Inc. operates as a diversified communications company in North America. The company operates through Consumer, Business Network Services, and Wireless segments. The Consumer segment provides cable telecommunications services, including video, Internet, Wi-Fi, phone, and satellite video services to residential customers. The Business Network Services segment provides data networking, video, voice, and Internet services through a national fiber-optic backbone network, as well as satellite video services to businesses and public-sector entities. The Wireless segment provides wireless voice and data communications services for customers. The company was formerly known as Shaw Cable systems Ltd. and changed its name to Shaw Communications Inc. in May 1993. Shaw Communications Inc. was founded in 1966 and is based in Calgary, Canada.

About WideOpenWest

WideOpenWest, Inc. operates as a cable operator in the United States. It provides high-speed data, cable television, voice over IP-based telephony, and business-class services to residential and business services customers. Its video services include basic cable services that comprise local broadcast television and local community programming; digital cable services; and ultra video products, as well as provides commercial-free movies, sports, and other special event entertainment programs. The company's telephony services consist of local area calling plans, local and long-distance plans, caller ID and waiting, voicemail, and toll packages. Its business telephony and data services include enhanced telephony services, data speeds of up to 10 gigabit per second on its fiber network, and office-to-office metro Ethernet services; hosted voice products that can replace customers' legacy private branch exchange products; session initiated protocol trunking services; and colocation infrastructure, cloud computing, managed backup, and recovery services. The company offers its services through hybrid fiber coaxial cable network. It offers its services in approximately 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina, and Tennessee. As of December 31, 2017, its networks passed 3,109 thousand homes and businesses and served 777 thousand customers. The company was formerly known as WideOpenWest Kite, Inc. and changed its name to WideOpenWest, Inc. in March 2017. The company was founded in 2001 and is based in Englewood, Colorado. WideOpenWest, Inc. is a subsidiary of WideOpenWest Holdings, LLC.

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