Telefonica (NYSE:TEF – Get Free Report) and Liberty Global (NASDAQ:LBTYA – Get Free Report) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.
Volatility and Risk
Telefonica has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Liberty Global has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.
Insider & Institutional Ownership
1.1% of Telefonica shares are owned by institutional investors. Comparatively, 37.2% of Liberty Global shares are owned by institutional investors. 0.0% of Telefonica shares are owned by company insiders. Comparatively, 11.5% of Liberty Global shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Telefonica | $40.69 billion | 0.73 | -$53.02 million | ($0.48) | -10.91 |
| Liberty Global | $4.34 billion | 0.87 | $1.59 billion | ($9.77) | -1.14 |
Liberty Global has lower revenue, but higher earnings than Telefonica. Telefonica is trading at a lower price-to-earnings ratio than Liberty Global, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings for Telefonica and Liberty Global, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Telefonica | 3 | 2 | 0 | 0 | 1.40 |
| Liberty Global | 2 | 6 | 2 | 0 | 2.00 |
Telefonica presently has a consensus target price of $4.20, indicating a potential downside of 19.77%. Liberty Global has a consensus target price of $14.26, indicating a potential upside of 28.44%. Given Liberty Global’s stronger consensus rating and higher possible upside, analysts clearly believe Liberty Global is more favorable than Telefonica.
Profitability
This table compares Telefonica and Liberty Global’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Telefonica | -5.88% | 8.57% | 1.99% |
| Liberty Global | -60.38% | -22.64% | -10.77% |
Summary
Liberty Global beats Telefonica on 9 of the 14 factors compared between the two stocks.
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.
About Liberty Global
Liberty Global Ltd., together with its subsidiaries, provides broadband internet, video, fixed-line telephony, and mobile communications services to residential and business customers. It offers value-added broadband services, such as WiFi features, security, anti-virus, firewall, spam protection, smart home services, online storage solutions, and web spaces; and Connect Box that delivers in-home Wi-Fi service. The company provides various tiers of digital video programming and audio services, as well as digital video recorders and multimedia home gateway systems; Horizon 5, a cloud-based, multi-screen entertainment platform that combines linear television, including recording and replay features and video-on-demand services; Horizon Go, an online mobile app; and channels, including general entertainment, sports, movies, series, documentaries, lifestyles, news, adult, children, and ethnic and foreign channels. In addition, it offers postpaid and prepaid mobile services; circuit-switched telephony services; and personal call manager, unified messaging, and a second or third phone line at an incremental cost. Further, the company offers business services comprising voice, advanced data, video, wireless, cloud-based services, and mobile and converged fixed-mobile services to small or home offices, small businesses, and medium and large enterprises, as well as on a wholesale basis to other operators. It operates in Belgium, Switzerland, Ireland, Slovakia, and internationally. Liberty Global Ltd. was founded in 2004 and is based in Hamilton, Bermuda.
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