Critical Contrast: Shenandoah Telecommunications (NASDAQ:SHEN) versus Telstra (OTCMKTS:TLSYY)

Shenandoah Telecommunications (NASDAQ:SHEN) and Telstra (OTCMKTS:TLSYY) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares Shenandoah Telecommunications and Telstra’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shenandoah Telecommunications	2.80%	1.24%	0.75%
Telstra	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent recommendations for Shenandoah Telecommunications and Telstra, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shenandoah Telecommunications	0	1	1	0	2.50
Telstra	0	0	0	0	N/A

Shenandoah Telecommunications presently has a consensus price target of $25.00, suggesting a potential upside of 76.06%. Given Shenandoah Telecommunications’ higher probable upside, equities analysts plainly believe Shenandoah Telecommunications is more favorable than Telstra.

Risk and Volatility

Shenandoah Telecommunications has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Telstra has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Earnings and Valuation

This table compares Shenandoah Telecommunications and Telstra’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shenandoah Telecommunications	$287.38 million	2.45	$8.04 million	$0.16	87.19
Telstra	$15.21 billion	1.90	$1.22 billion	N/A	N/A

Telstra has higher revenue and earnings than Shenandoah Telecommunications.

Dividends

Shenandoah Telecommunications pays an annual dividend of $0.09 per share and has a dividend yield of 0.6%. Telstra pays an annual dividend of $0.53 per share and has a dividend yield of 4.2%. Shenandoah Telecommunications pays out 56.3% of its earnings in the form of a dividend. Shenandoah Telecommunications has increased its dividend for 2 consecutive years.

Insider and Institutional Ownership

62.0% of Shenandoah Telecommunications shares are owned by institutional investors. 4.4% of Shenandoah Telecommunications shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Shenandoah Telecommunications beats Telstra on 9 of the 14 factors compared between the two stocks.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company, together with its subsidiaries, provides a range of broadband communication services and cell tower colocation space in the Mid-Atlantic portion of the United States. It operates in two segments, Broadband and Tower. The company Broadband segment offers broadband, video, and voice services to residential and commercial customers in Virginia, West Virginia, Maryland, Pennsylvania, and Kentucky through hybrid fiber coaxial cable under the Shentel brand; and fiber optic services under the Glo Fiber brand name. This segment also leases dark fiber and provides Ethernet and wavelength fiber optic services to enterprise and wholesale customers under the Glo Fiber Enterprise and Glo Fiber Wholesale brand names; and provides voice data and DSL telephone services. The Tower segment owns macro cellular towers and leases colocation space to the wireless communications providers. Shenandoah Telecommunications Company was founded in 1902 and is based in Edinburg, Virginia.

About Telstra

Telstra Corporation Limited provides telecommunications and information services to businesses, governments, and individuals in Australia and internationally. It operates in four segments: Telstra Consumer and Small Business, Telstra Enterprise, Networks and IT, and Telstra InfraCo. The company offers telecommunication, media and technology products and services in Australia using mobile and fixed network technologies, as well as operates call centers, retail stores, a dealership network, digital channels, distribution systems and Telstra Plus customer loyalty program. It also provides network capacity and management, unified communications, cloud, security, industry solutions, integrated and monitoring services to government and large enterprise and business customers; wholesale services, including voice and data; and telecommunication products and services to other carriers, carriage service providers, and internet service providers, as well as builds and manages digital platforms. In addition, the company operates the fixed passive network infrastructure, including data centers, exchanges, poles, ducts, pits and pipes, and fiber network; provides wholesale customers with access to network infrastructure; provides long-term access to components of infrastructure under the infrastructure services agreement; designs and constructs fiber, exchanges, and other infrastructure; and operates the passive and physical mobile tower assets owned or operated by the Amplitel Pty Ltd. The company was formerly known as Australian and Overseas Telecommunications Corporation Limited and changed its name to Telstra Corporation Limited in April 1993. Telstra Corporation Limited was founded in 1901 and is based in Melbourne, Australia.