Critical Analysis: Quebecor (OTCMKTS:QBCRF) vs. Verizon Communications (NYSE:VZ)

Verizon Communications (NYSE:VZ) and Quebecor (OTCMKTS:QBCRF) are both communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.

Analyst Recommendations

This is a breakdown of recent ratings for Verizon Communications and Quebecor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verizon Communications	0	12	8	0	2.40
Quebecor	0	2	3	0	2.60

Verizon Communications presently has a consensus target price of $50.90, indicating a potential upside of 11.19%. Given Verizon Communications’ higher possible upside, research analysts plainly believe Verizon Communications is more favorable than Quebecor.

Insider and Institutional Ownership

62.1% of Verizon Communications shares are owned by institutional investors. 0.0% of Verizon Communications 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.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verizon Communications	$138.90 billion	1.37	$17.17 billion	$3.84	11.92
Quebecor	$4.06 billion	2.38	$612.64 million	$1.46	29.60

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

Dividends

Verizon Communications pays an annual dividend of $2.83 per share and has a dividend yield of 6.2%. Quebecor pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Verizon Communications pays out 73.7% of its earnings in the form of a dividend. Quebecor pays out 87.7% 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 has raised its dividend for 20 consecutive years. Verizon Communications is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Verizon Communications	11.64%	19.48%	5.07%
Quebecor	16.30%	33.21%	7.17%

Summary

Verizon Communications beats Quebecor on 10 of the 16 factors compared between the two stocks.

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.

About Quebecor

Quebecor Inc., together with its subsidiaries, operates in the telecommunications, media, and sports and entertainment businesses in Canada. The Telecommunications segment offers internet access, television distribution, mobile and wireline telephony, business solutions, and over-the-top video services. The Media segment operates an over-the-air television network and specialty television services; soundstage and equipment rental and postproduction services for the film and television industries; printing, publishing, and distribution of daily newspapers; news and entertainment digital platforms; publishing and distribution of magazines; production and distribution of audiovisual content; and out-of-home advertising business. The Sports and Entertainment segment engages in the operation and management of the Videotron Centre; show production, sporting, and cultural event management; publishing and distribution of books; production of music; and the operation of Quebec Maritimes Junior Hockey League team. The company was incorporated in 1965 and is headquartered in Montreal, Canada. Quebecor Inc. operates as a subsidiary of Les Placements Peladeau, Inc.