Head-To-Head Analysis: Verizon Communications (VZ) and Altice USA (ATUS)

Altice USA (NASDAQ: ATUS) and Verizon Communications (NYSE:VZ) are both large-cap telecommunications services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Altice USA and Verizon Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altice USA 0 7 6 0 2.46
Verizon Communications 0 20 5 0 2.20

Altice USA presently has a consensus price target of $35.92, indicating a potential upside of 42.81%. Verizon Communications has a consensus price target of $53.02, indicating a potential upside of 9.66%. Given Altice USA’s stronger consensus rating and higher probable upside, equities analysts clearly believe Altice USA is more favorable than Verizon Communications.

Profitability

This table compares Altice USA and Verizon Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Altice USA -20.39% -63.90% -5.28%
Verizon Communications 12.88% 63.06% 6.27%

Valuation & Earnings

This table compares Altice USA and Verizon Communications’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Altice USA $9.20 billion 2.01 $3.69 billion N/A N/A
Verizon Communications $123.64 billion 1.60 $43.95 billion $3.90 12.40

Verizon Communications has higher revenue and earnings than Altice USA.

Dividends

Verizon Communications pays an annual dividend of $2.36 per share and has a dividend yield of 4.9%. Altice USA does not pay a dividend. Verizon Communications pays out 60.5% of its earnings in the form of a dividend. Verizon Communications has increased its dividend for 10 consecutive years.

Institutional & Insider Ownership

62.2% of Verizon Communications shares are held by institutional investors. 0.1% of Verizon Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Verizon Communications beats Altice USA on 9 of the 14 factors compared between the two stocks.

Altice USA Company Profile

Altice USA, Inc. is engaged in providing broadband communications and video services in the United States. The Company’s segments include Cablevision and Cequel. Cablevision provides broadband, pay television and telephony services to residential and business customers in and around the New York metropolitan area. Cequel provides broadband, pay television and telephony services to residential and business customers in the south-central United States. It also provides services through ten states of Texas, West Virginia, Louisiana, Arkansas, North Carolina, Oklahoma, Arizona, California, Missouri and Ohio. The Company also provides Wi-Fi hotspot access content and advertising services. Broadband provides services, such as video streaming, content downloading for time-shifted video consumption and other applications delivered over OTT platforms. Pay Television provides services through cable network. Video services delivered over DSL networks.

Verizon Communications Company Profile

Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales, to consumer, business and government customers across the United States. The Wireline segment offers voice, data and video communications products and services, such as broadband video, data center and cloud services, security and managed network services, and local and long distance voice services. The Company has combined Yahoo! Inc.’s operating assets with its existing AOL Inc. business to create a new subsidiary, Oath Inc., owns a diverse house of more than 50 media and technology brands. The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, Yahoo Finance and Yahoo Mail.

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