Financial Comparison: Rogers Communication (NYSE:RCI) and Telefonica (NYSE:TEF)

Rogers Communication (NYSE:RCI) and Telefonica (NYSE:TEF) are both large-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitability and earnings.

Institutional & Insider Ownership

45.5% of Rogers Communication shares are held by institutional investors. Comparatively, 1.1% of Telefonica shares are held by institutional investors. 29.0% of Rogers Communication shares are held by company insiders. Comparatively, 0.0% of Telefonica shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Rogers Communication and Telefonica”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rogers Communication	$15.04 billion	1.19	$1.27 billion	$2.33	14.31
Telefonica	$41.04 billion	0.73	-$53.02 million	($0.38)	-13.83

Rogers Communication has higher earnings, but lower revenue than Telefonica. Telefonica is trading at a lower price-to-earnings ratio than Rogers Communication, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Rogers Communication and Telefonica, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rogers Communication	1	4	3	0	2.25
Telefonica	1	5	0	0	1.83

Rogers Communication presently has a consensus price target of $67.00, indicating a potential upside of 100.95%. Given Rogers Communication’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Rogers Communication is more favorable than Telefonica.

Dividends

Rogers Communication pays an annual dividend of $1.46 per share and has a dividend yield of 4.4%. Telefonica pays an annual dividend of $0.25 per share and has a dividend yield of 4.8%. Rogers Communication pays out 62.7% of its earnings in the form of a dividend. Telefonica pays out -65.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Telefonica is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Rogers Communication and Telefonica’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rogers Communication	8.53%	25.28%	3.83%
Telefonica	-4.52%	9.30%	2.21%

Volatility and Risk

Rogers Communication has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Telefonica has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Summary

Rogers Communication beats Telefonica on 13 of the 16 factors compared between the two stocks.

About Rogers Communication

Rogers Communications Inc. operates as a communications and media company in Canada. It operates through three segments: Wireless, Cable, and Media. The company offers mobile Internet access, wireless voice and enhanced voice, device financing, device protection, global voice and data roaming, wireless home phone, bridging landline, machine-to-machine and Internet of Things solutions, and advanced wireless solutions for businesses, as well as device shipping and express pickup services; and postpaid and prepaid services under the Rogers, Fido, and chatr brands. It also provides internet and WiFi services; and monitoring, security, automation, energy efficiency, and smart control through smartphone app. In addition, the company offers local and network TV; on-demand television; cloud-based digital video recorders; voice-activated remote controls, and integrated apps; personal video recorders; linear and time-shifted programming; digital specialty channels; and 4K television programming. Further, it provides residential and small business local telephony services; voicemail, call waiting, and long distance; voice, data networking, Internet protocol (IP), and Ethernet services; private networking, Internet, IP voice, and cloud solutions; optical wave and multi-protocol label switching services; information technology and network technologies; cable access network services; telecommunications technical consulting services; and season games through television, smartphones, tablets, personal computers, and other streaming devices, as well as operates Ignite TV and Ignite TV app. Additionally, the company owns Toronto Blue Jays and the Rogers Centre event venue; and operates Sportsnet ONE, Sportsnet 360, Sportsnet World, Citytv, OMNI, FX (Canada), FXX (Canada), and OLN television networks, as well as 52 AM and FM radio stations. It also offers Rogers and the Rogers World Elite Mastercard. The company was founded in 1960 and is headquartered in Toronto, Canada.

About Telefonica

Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Europe and Latin America. The company offers mobile and related services and products, such as mobile voice, value added, mobile data and internet, wholesale, corporate, roaming, fixed wireless, and trunking and paging services. It also provides fixed telecommunication services, including PSTN lines; ISDN accesses; public telephone services; local, domestic, and international long-distance and fixed-to-mobile communications; corporate communications; supplementary value-added services; video telephony; intelligent network; and telephony information services, as well as leases and sells handset equipment and telephony information services. It also provides Internet and broadband multimedia services comprising internet service provider, portal and network, retail and wholesale broadband access, narrowband switched access, security, internet through fibre to the home, and voice over internet protocol services. In addition, the company offers leased line, virtual private network, fibre optics, web hosting and application, managed hosting, content delivery, outsourcing and application, desktop, and system integration and professional services. Further, the company offers wholesale services for telecommunication operators, including domestic interconnection and international wholesale services; leased lines for other operators; and local loop leasing services, as well as bit stream services, wholesale line rental accesses, and leased ducts for other operators' fiber deployment. Additionally, it provides video/TV services; smart connectivity and services, and consumer IoT products; financial and other payment, security, cloud, advertising, big data, and digital experience services; Aura; open gateway, living apps; smart Wi-Fi, Phoenix, NT, Solar 360, and Movistar Home devices. Telefónica, S.A. was incorporated in 1924 and is headquartered in Madrid, Spain.