Critical Contrast: PLDT (PHI) vs. Neustar (NSR)

PLDT (NYSE: PHI) and Neustar (NYSE:NSR) are both telecommunications services companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Dividends

PLDT pays an annual dividend of $1.23 per share and has a dividend yield of 4.1%. Neustar does not pay a dividend. PLDT pays out -34.8% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
PLDT 16.32% 25.56% 6.29%
Neustar 15.50% 19.28% 8.80%

Analyst Ratings

This is a summary of recent ratings and target prices for PLDT and Neustar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PLDT 1 3 2 0 2.17
Neustar 0 1 0 0 2.00

Neustar has a consensus target price of $29.00, indicating a potential downside of 13.43%. Given Neustar’s higher possible upside, analysts clearly believe Neustar is more favorable than PLDT.

Valuation and Earnings

This table compares PLDT and Neustar’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PLDT $3.49 billion 1.86 $422.12 million ($3.53) -8.50
Neustar N/A N/A N/A $3.27 10.24

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

Insider & Institutional Ownership

9.0% of PLDT shares are held by institutional investors. Comparatively, 88.8% of Neustar shares are held by institutional investors. 2.9% of Neustar shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

PLDT beats Neustar on 7 of the 12 factors compared between the two stocks.

PLDT Company Profile

PLDT, Inc., formerly Philippine Long Distance Telephone Company (PLDT), is a telecommunications service provider in the Philippines. The Company operates through three business segments: Wireless, Fixed Line and Others. The Company, through its business segments, offers a range of telecommunications services across the Philippines’ fiber optic backbone and wireless and fixed line networks. The Company’s wireless segment provides cellular, wireless broadband and other services, and digital platforms and mobile financial services. Its Fixed Line segment provides local exchange, international long distance, national long distance, data and other network and miscellaneous services under its fixed line business. It offers postpaid and prepaid fixed line services. Its Other business consists of PLDT Communications and Energy Ventures, Inc. (PCEV), an investment holding company. It also focuses on providing wireless voice communications and wireless data communications.

Neustar Company Profile

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

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