Comparing Telefonica Brasil (NYSE:VIV) & PLDT (NYSE:PHI)

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

Risk & Volatility

PLDT has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Telefonica Brasil has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for PLDT and Telefonica Brasil, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PLDT	0	4	0	0	2.00
Telefonica Brasil	2	6	1	0	1.89

Telefonica Brasil has a consensus target price of $14.26, indicating a potential upside of 19.28%. Given Telefonica Brasil’s higher possible upside, analysts plainly believe Telefonica Brasil is more favorable than PLDT.

Valuation and Earnings

This table compares PLDT and Telefonica Brasil”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PLDT	$220.89 billion	0.02	$498.72 million	$2.22	7.52
Telefonica Brasil	$61.77 billion	0.31	$1.10 billion	$0.86	13.90

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

Dividends

PLDT pays an annual dividend of $1.08 per share and has a dividend yield of 6.5%. Telefonica Brasil pays an annual dividend of $0.60 per share and has a dividend yield of 5.0%. PLDT pays out 48.6% of its earnings in the form of a dividend. Telefonica Brasil pays out 69.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. PLDT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

2.3% of PLDT shares are held by institutional investors. Comparatively, 5.2% of Telefonica Brasil shares are held by institutional investors. 0.7% of PLDT shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PLDT	12.81%	26.76%	5.36%
Telefonica Brasil	11.40%	10.69%	5.63%

Summary

PLDT beats Telefonica Brasil on 9 of the 16 factors compared between the two stocks.

About PLDT

PLDT Inc. is a telecommunications and digital services provider based in the Philippines. Founded in 1928, the company operates an integrated network serving residential, business and government customers across the country. Its services include mobile voice and data through its Smart brand, fixed-line telephony, home broadband and enterprise connectivity. Through its business units and subsidiaries, PLDT also provides information and communications technology services, cloud and data-center solutions, and other digital services.

About Telefonica Brasil

Telefônica Brasil S.A. is a Brazilian telecommunications company that provides services under the Vivo brand. It is part of the Spanish Telefónica Group and serves consumers, businesses and public-sector customers across Brazil. Its offerings include mobile voice and data, fixed-line telephone service, broadband internet—including fiber connectivity—and pay television. The company also provides connectivity and digital services for business customers. Telefônica Brasil traces its origins to the 1998 privatization of Brazil’s telecommunications sector, when Telefónica acquired Telesp, the former state-controlled telephone operator in São Paulo.