Analyzing Telecom Italia (OTCMKTS:TIIAY) & Gogo (OTCMKTS:GOGO)

Telecom Italia (OTCMKTS:TIIAY) and Gogo (NASDAQ:GOGO) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Volatility & Risk

Telecom Italia has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Gogo has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Valuation & Earnings

This table compares Telecom Italia and Gogo’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telecom Italia $22.77 billion 0.45 -$1.67 billion ($0.71) -6.79
Gogo $893.76 million 0.41 -$162.03 million ($1.83) -2.30

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

Institutional and Insider Ownership

0.8% of Telecom Italia shares are owned by institutional investors. Comparatively, 59.1% of Gogo shares are owned by institutional investors. 41.5% of Gogo shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Telecom Italia and Gogo, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telecom Italia 0 0 0 0 N/A
Gogo 1 0 3 0 2.50

Gogo has a consensus price target of $6.17, suggesting a potential upside of 46.83%. Given Gogo’s higher probable upside, analysts plainly believe Gogo is more favorable than Telecom Italia.

Profitability

This table compares Telecom Italia and Gogo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telecom Italia N/A N/A N/A
Gogo -23.38% N/A -10.77%

Summary

Gogo beats Telecom Italia on 7 of the 12 factors compared between the two stocks.

Telecom Italia Company Profile

Telecom Italia S.p.A., together with its subsidiaries, provides fixed and mobile telecommunications services in Europe, South America, and the Mediterranean Basin. The company operates through Domestic, Brazil, and Other Operations segments. It offers fixed and mobile voice and Internet, and public telephony services, as well as products managed and developed for individuals and families; and voice, data, and Internet services and products, and information and communications technology solutions for small and medium-size enterprises, small offices/home offices, the public sector, large accounts, and enterprises in the fixed and mobile telecommunications markets. The company also manages and develops a portfolio of regulated and unregulated wholesale services for fixed and mobile telecommunications operators; provision of infrastructure for housing radio transmission equipment of mobile telephone networks; and development, engineering, building, and operation of network infrastructures, information technology (IT), real estate properties, and plant engineering. In addition, it engages in customer care, operating credit support, loyalty, and retention activities; and staff functions and other support activities. Further, the company offers office products and services for IT sector. The company was founded in 1908 and is headquartered in Rome, Italy.

Gogo Company Profile

Gogo Inc., through its subsidiaries, provides inflight broadband connectivity and wireless entertainment services to the aviation industry in the United States and internationally. It operates through three segments: Commercial Aviation North America (CA-NA), Commercial Aviation Rest of World (CA-ROW), and Business Aviation (BA). The CA-NA segment offers inflight connectivity and wireless digital entertainment solutions to commercial airline passengers flying routes that generally begin and end within North America. The CA-ROW segment provides inflight connectivity and wireless digital entertainment solutions to passengers flying on foreign-based commercial airlines and flights outside of North America for North American based commercial airlines. The BA segment offers equipment for inflight connectivity, including voice and data services to the business aviation market. Its services include AVANCE, an inflight broadband service that utilizes air-to-ground (ATG) network and ATG spectrum; Passenger Entertainment, an inflight entertainment service; and satellite-based voice and data services through strategic alliances with satellite companies. This segment serves aircraft manufacturers, owners, and operators, as well as government and military entities. The company was founded in 1991 and is headquartered in Chicago, Illinois.

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