Level 3 Communications (NYSE: LVLT) and BT Group PLC (NYSE:BT) are both large-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitabiliy, risk, analyst recommendations, dividends, earnings and institutional ownership.
Dividends
BT Group PLC pays an annual dividend of $0.90 per share and has a dividend yield of 4.4%. Level 3 Communications does not pay a dividend. BT Group PLC pays out 70.9% of its earnings in the form of a dividend. BT Group PLC has raised its dividend for 5 consecutive years.
Earnings and Valuation
This table compares Level 3 Communications and BT Group PLC’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Level 3 Communications | $8.17 billion | 2.59 | $2.66 billion | $1.75 | 33.52 |
| BT Group PLC | $31.02 billion | 1.29 | $8.90 billion | $1.27 | 15.93 |
BT Group PLC has higher revenue and earnings than Level 3 Communications. BT Group PLC is trading at a lower price-to-earnings ratio than Level 3 Communications, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Level 3 Communications and BT Group PLC’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Level 3 Communications | 7.80% | 6.23% | 2.71% |
| BT Group PLC | 8.48% | 36.64% | 6.84% |
Volatility and Risk
Level 3 Communications has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, BT Group PLC has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Level 3 Communications and BT Group PLC, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Level 3 Communications | 1 | 11 | 2 | 0 | 2.07 |
| BT Group PLC | 3 | 7 | 8 | 0 | 2.28 |
Level 3 Communications presently has a consensus target price of $60.41, indicating a potential upside of 2.98%. BT Group PLC has a consensus target price of $362.65, indicating a potential upside of 1,692.62%. Given BT Group PLC’s stronger consensus rating and higher possible upside, analysts clearly believe BT Group PLC is more favorable than Level 3 Communications.
Institutional and Insider Ownership
1.0% of BT Group PLC shares are held by institutional investors. 0.5% of Level 3 Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
BT Group PLC beats Level 3 Communications on 11 of the 17 factors compared between the two stocks.
About Level 3 Communications
Level 3 Communications, Inc. is a provider of a range of integrated communications services. The Company’s operating segments include North America, EMEA and Latin America. The North America includes operations in Atlanta, Georgia; Littleton, Colorado; Miami, Florida; Montreal, Canada; New York, New York; Phoenix, Arizona; Pittsburgh, Pennsylvania; Southfield, Michigan, and Tulsa, Oklahoma. The Europe segment includes operations in Basingstoke, England; Crewe, England; Dublin, Ireland; London, England; Amsterdam, The Netherlands, and Paris, France. The Latin America includes operations in Colombia; Buenos Aires, Argentina; Caracas, Venezuela; Lima, Peru; Quito, Ecuador; Santiago, Chile, and Sao Paulo, Brazil. It offers optical, Internet Protocol, computing and storage technologies. It offers a range of communications services, including Internet Protocol (IP) and data services, transport and fiber services, colocation and data center services, security services and voice services.
About BT Group PLC
BT Group plc is a communications services company. The Company is engaged in selling fixed-voice services, broadband, mobile and television products and services, as well as managed networked information technology (IT) solutions and cyber security protection. Its segments include Consumer, which provides fixed-voice, broadband, TV and mobile services; EE, which is a mobile network operator in the United Kingdom and provides mobile and fixed communications services to consumers; Business and Public Sector, which provides communications and IT services to businesses and the public sector in the United Kingdom and the Republic of Ireland (RoI) ;Global Services, which provides managed networked IT services to corporate customers; Wholesale and Ventures, which provides fixed and mobile services to communications providers (CPs); and Openreach, which provides copper and fiber connections between its exchanges and homes and businesses.
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