Analyzing Telecom Italia (TI) and Shaw Communications (NYSE:SJR)

Shaw Communications (NYSE: SJR) and Telecom Italia (NYSE:TI) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Dividends

Shaw Communications pays an annual dividend of $0.92 per share and has a dividend yield of 4.5%. Telecom Italia does not pay a dividend. Shaw Communications pays out 66.7% of its earnings in the form of a dividend.

Volatility & Risk

Shaw Communications has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Telecom Italia has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Shaw Communications and Telecom Italia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shaw Communications 1 4 1 0 2.00
Telecom Italia 1 2 1 0 2.00

Shaw Communications currently has a consensus target price of $27.33, indicating a potential upside of 32.56%. Telecom Italia has a consensus target price of $1.80, indicating a potential downside of 79.31%. Given Shaw Communications’ higher probable upside, analysts clearly believe Shaw Communications is more favorable than Telecom Italia.

Valuation & Earnings

This table compares Shaw Communications and Telecom Italia’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shaw Communications $3.70 billion 2.66 $644.63 million $1.38 14.94
Telecom Italia $21.06 billion 0.88 $2.00 billion N/A N/A

Telecom Italia has higher revenue and earnings than Shaw Communications.

Profitability

This table compares Shaw Communications and Telecom Italia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shaw Communications 17.34% 9.89% 3.97%
Telecom Italia N/A N/A N/A

Insider and Institutional Ownership

52.5% of Shaw Communications shares are owned by institutional investors. Comparatively, 0.8% of Telecom Italia shares are owned by institutional investors. 1.0% of Shaw Communications shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Shaw Communications beats Telecom Italia on 9 of the 12 factors compared between the two stocks.

Shaw Communications Company Profile

Shaw Communications Inc. (Shaw) is a diversified connectivity provider. The Company operates through four divisions: Consumer, Wireless, Business Network Services and Business Infrastructure Services. Under the Consumer division, the Company offers Cable telecommunications and Satellite video services to residential customers. Its Business Network Services division offers data networking, Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities. Its Business Infrastructure Services division offers data center colocation, cloud technology and managed information technology (IT) solutions to businesses. The Company offers wireless services for voice and data communications through its Wireless division. Its wireline services offer approximately 120 high definition (HD) channels and over 10,000 on-demand, pay-per-view and subscription movie and television programming titles.

Telecom Italia Company Profile

Telecom Italia S.p.A. (Telecom Italia) operates fixed voice and data infrastructure in Italy, and provides mobile network platforms. The Company focuses on various areas of digital services, including Enriched Communication, Trusted Digital Life, Business Life, Indoor Life, Mobile Open Life and Digital Entertainment. Its segments include Consumer, Business, National Wholesale and Other. It is engaged in developing various projects in areas, including Smart Green, Social Reading, Solutions for good schooling, Digital tourism 2.0, Smart Home, FriendTV and Big Data. Smart Green is the assessment of projects connected with the environment and potential partnerships with the local government offices for the monitoring of air in public offices and urban areas, using networks of sensors connected to the Company’s Cloud. The Company is involved, either alone or in partnership with external partners, in devising and developing healthcare services at national, regional and local level.

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