Head-To-Head Comparison: Frontier Communications (FTR) and PCCW (PCCWY)

Frontier Communications (NASDAQ: FTR) and PCCW (OTCMKTS:PCCWY) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Dividends

Frontier Communications pays an annual dividend of $1.80 per share and has a dividend yield of 19.5%. PCCW pays an annual dividend of $0.50 per share and has a dividend yield of 8.7%. Frontier Communications pays out -47.5% of its earnings in the form of a dividend.

Insider & Institutional Ownership

68.7% of Frontier Communications shares are owned by institutional investors. Comparatively, 0.0% of PCCW shares are owned by institutional investors. 2.3% of Frontier Communications shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Frontier Communications and PCCW’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Frontier Communications $9.13 billion 0.08 -$1.80 billion ($3.79) -2.44
PCCW $4.75 billion 0.93 $288.16 million N/A N/A

PCCW has lower revenue, but higher earnings than Frontier Communications.

Analyst Ratings

This is a summary of current recommendations for Frontier Communications and PCCW, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontier Communications 6 8 0 0 1.57
PCCW 0 0 0 0 N/A

Frontier Communications presently has a consensus target price of $11.06, suggesting a potential upside of 19.85%. Given Frontier Communications’ higher probable upside, equities research analysts clearly believe Frontier Communications is more favorable than PCCW.

Profitability

This table compares Frontier Communications and PCCW’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Frontier Communications -19.05% -3.06% -0.34%
PCCW N/A N/A N/A

Volatility & Risk

Frontier Communications has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, PCCW has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500.

Summary

Frontier Communications beats PCCW on 7 of the 12 factors compared between the two stocks.

About Frontier Communications

Frontier Communications Corporation provides communications services to consumer, commercial, and wholesale customers in the United States. It offers broadband, video, voice, and other services and products through a combination of fiber and copper based networks to consumer customers. The company also provides broadband, Ethernet, traditional circuit-based, and voice services; and software defined wide area network, multiprotocol label switching, and time division multiplexing data transport and optical transport services to small, medium, and large enterprises, as well as advanced hardware and network solutions and services, and customer premise equipment. In addition, it offers 24/7 technical support; wireless broadband services in selected markets; satellite TV video services; voice services, including data-based VoIP, and long distance and voice messaging services; and a package of communications services. Further, the company provides a range of access services that allow other carriers to use facilities to originate and terminate their local and long distance voice traffic. As of December 31, 2017, it served approximately 4.9 million customers and 3.9 million broadband subscribers in 29 states. The company was formerly known as Citizens Communications Company and changed its name to Frontier Communications Corporation in July 2008. Frontier Communications Corporation was founded in 1927 and is based in Norwalk, Connecticut.

About PCCW

PCCW Limited provides telecommunications and related services in Hong Kong, Macau, Mainland China, and internationally. The company's services include local telephony, local data and broadband, mobile and international telecommunications, and satellite-based and network-based telecommunications services; and outsourcing, consulting, and contact center services. It also provides technical support, electronics communications engineering, and products and solutions, as well as free television, pay television program, and interactive multimedia services; sells advertising in various telephone directories and on the Internet; publishes directories; and sells mobile handsets and accessories. In addition, the company offers broadcasting and related services, management and engineering support services, customer relationship management and customer contact management solutions, content for various media, and outsourced call center and data center services; and over-the-top video services under the Viu brand, as well as sells customer premises equipment and related solutions. Further, it engages in the sale, distribution, and marketing of telecommunication products; supply of broadband Internet access solutions and Web services; provision of data services, and; software development, systems integration, consulting, and informatization activities; the provision of computer and IP/IT related value-added services to business customers; logistics, printing, business process, and ICT solutions; property investment, development, management, and leasing activities; and ski operations. Additionally, the company offers Internet portal digital media entertainment platform; technical consultancy services; multi-platform digital music services; and infrastructure construction, application, and specific business process outsourcing services, as well as cloud computing solutions. PCCW Limited was founded in 1925 and is headquartered in Quarry Bay, Hong Kong.

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