Verizon Communications (NYSE: VZ) and TELUS Corporation (NYSE:TU) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.
Dividends
Verizon Communications pays an annual dividend of $2.31 per share and has a dividend yield of 4.7%. TELUS Corporation pays an annual dividend of $1.46 per share and has a dividend yield of 4.1%. Verizon Communications pays out 59.2% of its earnings in the form of a dividend. TELUS Corporation pays out 92.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TELUS Corporation has raised its dividend for 10 consecutive years. Verizon Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Verizon Communications and TELUS Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Verizon Communications | 12.88% | 63.06% | 6.27% |
| TELUS Corporation | 9.55% | 18.75% | 5.44% |
Analyst Ratings
This is a summary of current ratings and price targets for Verizon Communications and TELUS Corporation, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Verizon Communications | 0 | 20 | 5 | 0 | 2.20 |
| TELUS Corporation | 0 | 0 | 5 | 0 | 3.00 |
Verizon Communications presently has a consensus target price of $52.87, suggesting a potential upside of 8.61%. TELUS Corporation has a consensus target price of $45.00, suggesting a potential upside of 25.94%. Given TELUS Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe TELUS Corporation is more favorable than Verizon Communications.
Risk & Volatility
Verizon Communications has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, TELUS Corporation has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.
Insider and Institutional Ownership
62.3% of Verizon Communications shares are owned by institutional investors. Comparatively, 52.7% of TELUS Corporation shares are owned by institutional investors. 0.1% of Verizon Communications shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Verizon Communications and TELUS Corporation’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Verizon Communications | $123.64 billion | 1.61 | $43.95 billion | $3.90 | 12.48 |
| TELUS Corporation | $10.20 billion | 2.08 | $3.23 billion | $1.58 | 22.61 |
Verizon Communications has higher revenue and earnings than TELUS Corporation. Verizon Communications is trading at a lower price-to-earnings ratio than TELUS Corporation, indicating that it is currently the more affordable of the two stocks.
Summary
Verizon Communications beats TELUS Corporation on 10 of the 16 factors compared between the two stocks.
Verizon Communications Company Profile
Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales, to consumer, business and government customers across the United States. The Wireline segment offers voice, data and video communications products and services, such as broadband video, data center and cloud services, security and managed network services, and local and long distance voice services. The Company has combined Yahoo! Inc.’s operating assets with its existing AOL Inc. business to create a new subsidiary, Oath Inc., owns a diverse house of more than 50 media and technology brands. The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, Yahoo Finance and Yahoo Mail.
TELUS Corporation Company Profile
TELUS Corporation (TELUS) is a telecommunications company. The Company provides a range of telecommunications services and products, including wireless and wireline voice and data. Its data services include Internet protocol (IP), television (TV), hosting, managed information technology and cloud-based services, and certain healthcare solutions. The Company operates through two business segments: Wireless segment and Wireline segment. Its wireless and wireline businesses are primarily operated through TELUS Communications Company (TCC). The Company offers business services, including healthcare, across wireless and wireline are supported through TELUS sales representatives, product specialists, independent dealers and online self-serve applications for small and medium-sized businesses (SMBs). Its business process outsourcing services are supported through sales representatives and client relationship management teams.
Receive News & Ratings for Verizon Communications Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Verizon Communications Inc. and related companies with MarketBeat.com's FREE daily email newsletter.
