Analyzing Telefonica Brasil (NYSE:VIV) and VEON (NASDAQ:VEON)

VEON (NASDAQ:VEON) and Telefonica Brasil (NYSE:VIV) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Insider and Institutional Ownership

21.3% of VEON shares are owned by institutional investors. Comparatively, 5.2% of Telefonica Brasil shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for VEON and Telefonica Brasil, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VEON	0	2	1	1	2.75
Telefonica Brasil	2	4	2	0	2.00

VEON currently has a consensus price target of $60.00, indicating a potential upside of 11.03%. Telefonica Brasil has a consensus price target of $13.12, indicating a potential downside of 5.88%. Given VEON’s stronger consensus rating and higher possible upside, research analysts clearly believe VEON is more favorable than Telefonica Brasil.

Profitability

This table compares VEON and Telefonica Brasil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VEON	15.26%	58.72%	10.13%
Telefonica Brasil	10.37%	8.67%	4.75%

Valuation & Earnings

This table compares VEON and Telefonica Brasil”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VEON	$4.00 billion	0.93	$415.00 million	$8.80	6.14
Telefonica Brasil	$10.36 billion	2.19	$1.03 billion	$0.66	21.12

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

Risk and Volatility

VEON has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500. Comparatively, Telefonica Brasil has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Summary

VEON beats Telefonica Brasil on 9 of the 14 factors compared between the two stocks.

About VEON

VEON Ltd., a digital operator, provides connectivity and internet services in Pakistan, Ukraine, Kazakhstan, Bangladesh, Uzbekistan, and Kyrgyzstan. It offers mobile telecommunications services, including value added and call completion, national and international roaming, wireless Internet access, mobile financial, and mobile bundle services; data connectivity, cross border transit, voice, Internet, and data services; fixed-line telecommunications using intercity fiber optic networks; and Internet-TV using Fiber to the building technology. The company also sells equipment, infrastructure, and accessories. VEON Ltd. was founded in 1992 and is headquartered in Amsterdam, the Netherlands.

About Telefonica Brasil

Telefônica Brasil S.A., together with its subsidiaries, operates as a mobile telecommunications company in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband internet access through 3G, 4G, 4.5G, and 5G, as well as mobile value-added and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through IPTV technologies; network services, such as rental of facilities; other services comprising internet access, private network connectivity, computer equipment leasing, extended service, caller identification, voice mail, cellular blocker, and others; wholesale services, including interconnection services to users of other network providers; and digital services, such as entertainment, cloud, and security and financial services. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices, such as smartphones, broadband USB modems, and other devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, manufacturing, services, financial institutions, government, etc. It markets and sells its solutions through own stores, dealers, retail and distribution channels, door-to-door sales, and outbound tele sales. The company was formerly known as Telecomunicações de São Paulo S.A. – TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil.