Head-To-Head Survey: Spok (NASDAQ:SPOK) and Verizon Communications (NYSE:VZ)

Spok (NASDAQ:SPOK) and Verizon Communications (NYSE:VZ) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Valuation & Earnings

This table compares Spok and Verizon Communications”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spok	$139.04 million	2.47	$14.97 million	$0.78	21.42
Verizon Communications	$135.29 billion	1.30	$17.51 billion	$4.20	9.93

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

Insider & Institutional Ownership

50.8% of Spok shares are held by institutional investors. Comparatively, 62.1% of Verizon Communications shares are held by institutional investors. 7.4% of Spok shares are held by company insiders. Comparatively, 0.1% of Verizon Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Spok and Verizon Communications, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spok	0	0	0	1	4.00
Verizon Communications	0	9	7	2	2.61

Spok presently has a consensus price target of $20.00, indicating a potential upside of 19.69%. Verizon Communications has a consensus price target of $47.41, indicating a potential upside of 13.71%. Given Spok’s stronger consensus rating and higher possible upside, analysts clearly believe Spok is more favorable than Verizon Communications.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Spok	11.45%	10.26%	7.45%
Verizon Communications	13.14%	19.66%	5.13%

Risk & Volatility

Spok has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Verizon Communications has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.

Dividends

Spok pays an annual dividend of $1.25 per share and has a dividend yield of 7.5%. Verizon Communications pays an annual dividend of $2.71 per share and has a dividend yield of 6.5%. Spok pays out 160.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Verizon Communications pays out 64.5% of its earnings in the form of a dividend. Verizon Communications has increased its dividend for 20 consecutive years.

Summary

Verizon Communications beats Spok on 10 of the 18 factors compared between the two stocks.

About Spok

Spok Holdings, Inc., through its subsidiary, Spok, Inc., provides healthcare communication solutions in the United States, Europe, Canada, Australia, Asia, and the Middle East. The company's products and services enhance workflows for clinicians and support administrative compliance. It delivers clinical information to care teams when and where it matters to enhance patient outcomes; and provides GenA Pager, a one-way alphanumeric pager. The company offers subscriptions to one-way or two-way messaging services, as well as alphanumeric pagers that are configurable to support unencrypted or encrypted operation; and ancillary services, such as voicemail, and equipment loss or maintenance protection services, as well as sells devices to resellers who lease or resell them to their subscribers. Its Spok Care Connect suite products for contact centers, clinical alerting and notification, mobile communications and messaging, and public safety notifications. In addition, the company provides professional, software license updates, and product support services, as well as sells third-party equipment. It serves businesses, professionals, management personnel, medical personnel, field sales personnel and service forces, members of the construction industry and construction trades, real estate brokers and developers, sales and services organizations, specialty trade organizations, manufacturing organizations, and government agencies. The company was formerly known as USA Mobility, Inc. and changed its name to Spok Holdings, Inc. in July 2014. Spok Holdings, Inc. was founded in 1986 and is headquartered in Alexandria, Virginia.

About Verizon Communications

Verizon Communications Inc., through its subsidiaries, engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It operates in two segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business). The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements; and fixed wireless access (FWA) broadband through its wireless networks, as well as related equipment and devices, such as smartphones, tablets, smart watches, and other wireless-enabled connected devices. The segment also offers wireline services in the Mid-Atlantic and Northeastern United States, as well as Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network. The Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and conferencing, corporate networking, security and managed network, local and long-distance voice, and network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was incorporated in 1983 and is headquartered in New York, New York.