Telecom Argentina Stet - France Telecom (TEO) versus Black Box Corporation (BBOX) Financial Contrast

Telecom Argentina Stet – France Telecom (NYSE: TEO) and Black Box Corporation (NASDAQ:BBOX) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitabiliy, valuation, institutional ownership, earnings and analyst recommendations.

Volatility & Risk

Telecom Argentina Stet – France Telecom has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500. Comparatively, Black Box Corporation has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.

Dividends

Telecom Argentina Stet – France Telecom pays an annual dividend of $0.45 per share and has a dividend yield of 1.6%. Black Box Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 6.0%. Telecom Argentina Stet – France Telecom pays out 26.6% of its earnings in the form of a dividend. Black Box Corporation pays out -104.3% 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. Black Box Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

5.8% of Telecom Argentina Stet – France Telecom shares are held by institutional investors. Comparatively, 94.8% of Black Box Corporation shares are held by institutional investors. 1.0% of Telecom Argentina Stet – France Telecom shares are held by company insiders. Comparatively, 3.7% of Black Box Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Telecom Argentina Stet – France Telecom and Black Box Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telecom Argentina Stet – France Telecom	8.92%	25.23%	10.79%
Black Box Corporation	-0.83%	7.74%	2.54%

Earnings and Valuation

This table compares Telecom Argentina Stet – France Telecom and Black Box Corporation’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Telecom Argentina Stet – France Telecom	$3.28 billion	1.62	$855.80 million	$1.69	16.22
Black Box Corporation	$855.73 million	0.14	$31.73 million	($0.46)	-17.50

Telecom Argentina Stet – France Telecom has higher revenue and earnings than Black Box Corporation. Black Box Corporation is trading at a lower price-to-earnings ratio than Telecom Argentina Stet – France Telecom, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Telecom Argentina Stet – France Telecom and Black Box Corporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telecom Argentina Stet – France Telecom	0	1	3	0	2.75
Black Box Corporation	0	0	1	0	3.00

Telecom Argentina Stet – France Telecom presently has a consensus price target of $26.50, indicating a potential downside of 3.36%. Black Box Corporation has a consensus price target of $10.00, indicating a potential upside of 24.22%. Given Black Box Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Black Box Corporation is more favorable than Telecom Argentina Stet – France Telecom.

Summary

Telecom Argentina Stet – France Telecom beats Black Box Corporation on 9 of the 15 factors compared between the two stocks.

About Telecom Argentina Stet – France Telecom

Telecom Argentina S.A. provides fixed-line telecommunications services in Argentina, and also provides other telephone-related services, such as international long-distance service, data transmission, information technology solutions outsourcing and Internet services. The Company’s segments include Fixed Telecommunications Services (Fixed Services), Personal Mobile Telecommunications Services (Personal Mobile Services) and Nucleo Mobile Telecommunications Services (Nucleo Mobile Services). The Company, through its subsidiaries, also provides mobile telecommunications services and international wholesale services. The Fixed services segment consists of basic telephone services, interconnection services, data transmission and Internet services, information and communication technology services, and other telephone services. The Company, through its subsidiaries, such as Telecom Personal S.A. and Nucleo S.A., provides mobile services in Argentina and Paraguay, respectively.

About Black Box Corporation

Black Box Corporation is a technology solutions provider. The Company is engaged in designing, building, managing and securing the information technology (IT) infrastructure. Offerings under the Company’s Products platform include IT infrastructure, specialty networking, multimedia and keyboard/video/mouse (KVM) switching. Offerings under its Services platform include unified communications, data infrastructure and managed services. It conducts business globally and manages its business on a geographic-service type basis consisting of four segments: North America Products, North America Services, International Products and International Services. The offerings of its Products platform are distributed through value-added resellers, direct marketing manufacturers, mass merchandisers, Web retailers and others. The offerings of its Services platform are distributed through value-added resellers, manufacturers and large system integrators, among others.