Critical Contrast: Equinix (NASDAQ:EQIX) & Uniti Group (NASDAQ:UNIT)

Uniti Group (NASDAQ:UNIT) and Equinix (NASDAQ:EQIX) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.

Institutional & Insider Ownership

87.5% of Uniti Group shares are owned by institutional investors. Comparatively, 94.9% of Equinix shares are owned by institutional investors. 1.4% of Uniti Group shares are owned by insiders. Comparatively, 0.3% of Equinix shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Uniti Group pays an annual dividend of $0.60 per share and has a dividend yield of 10.1%. Equinix pays an annual dividend of $17.04 per share and has a dividend yield of 1.9%. Uniti Group pays out 146.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equinix pays out 153.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Uniti Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Uniti Group has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500. Comparatively, Equinix has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Earnings and Valuation

This table compares Uniti Group and Equinix”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Uniti Group	$1.15 billion	1.26	-$81.71 million	$0.41	14.46
Equinix	$8.60 billion	10.13	$969.18 million	$11.09	81.43

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

Profitability

This table compares Uniti Group and Equinix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Uniti Group	8.82%	-4.12%	2.02%
Equinix	12.29%	8.34%	3.18%

Analyst Recommendations

This is a breakdown of recent recommendations for Uniti Group and Equinix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Uniti Group	0	1	2	0	2.67
Equinix	0	5	14	1	2.80

Uniti Group currently has a consensus price target of $7.17, suggesting a potential upside of 20.85%. Equinix has a consensus price target of $944.63, suggesting a potential upside of 4.61%. Given Uniti Group’s higher possible upside, equities research analysts clearly believe Uniti Group is more favorable than Equinix.

Summary

Equinix beats Uniti Group on 12 of the 17 factors compared between the two stocks.

About Uniti Group

Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of fiber and other wireless solutions for the communications industry. As of December 31, 2023, Uniti owns approximately 140,000 fiber route miles, 8.5 million fiber strand miles, and other communications real estate throughout the United States.

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company . Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.