Level 3 Communications (NYSE: LVLT) and IDT (NYSE:IDT) are both telecommunications services companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.
Valuation & Earnings
This table compares Level 3 Communications and IDT’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Level 3 Communications||N/A||N/A||N/A||$1.77||30.30|
|IDT||$1.50 billion||0.21||$8.17 million||($0.66)||-19.08|
IDT has higher revenue and earnings than Level 3 Communications. IDT 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.
Risk and Volatility
Level 3 Communications has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, IDT has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.
This is a summary of current ratings and target prices for Level 3 Communications and IDT, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Level 3 Communications||1||4||0||0||1.80|
Level 3 Communications currently has a consensus price target of $60.47, indicating a potential upside of 12.75%. Given Level 3 Communications’ higher probable upside, equities research analysts clearly believe Level 3 Communications is more favorable than IDT.
Insider & Institutional Ownership
98.8% of Level 3 Communications shares are held by institutional investors. Comparatively, 52.7% of IDT shares are held by institutional investors. 0.5% of Level 3 Communications shares are held by insiders. Comparatively, 21.8% of IDT shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares Level 3 Communications and IDT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Level 3 Communications||7.47%||5.52%||2.45%|
IDT pays an annual dividend of $0.76 per share and has a dividend yield of 6.0%. Level 3 Communications does not pay a dividend. IDT pays out -115.2% of its earnings in the form of a dividend.
IDT beats Level 3 Communications on 6 of the 11 factors compared between the two stocks.
Level 3 Communications Company Profile
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.
IDT Company Profile
IDT Corporation is a holding company with operations primarily in the telecommunications and payment industries. The Company’s segments include Telecom Platform Services, Consumer Phone Services and All Other. The Company’s Telecom Platform Services segment provides retail telecommunications and payment offerings, as well as wholesale international long distance traffic termination. The Telecom Platform Services segment markets and distributes multiple communications and payment services across four businesses: Retail Communications, Wholesale Carrier Services, Payment Services and Hosted Platform Solutions. The Company’s Consumer Phone Services segment provides consumer local and long distance services in certain states of the United States. The Telecom Platform Services and Consumer Phone Services segments comprise the Company’s IDT Telecom division. The All Other segment includes its real estate holdings and other smaller businesses.
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