Comparing Telecom Argentina (NYSE:TEO) and Orange (OTC:ORANY)

Telecom Argentina (NYSE:TEO) and Orange (OTC:ORANY) are two telecommunications companies listed as utilities, and investors often wonder which one makes the better investment. In this analysis, we will evaluate both companies by examining various factors such as earnings strength, risk, valuation metrics, profitability, institutional ownership, dividends, and analyst recommendations.

Analyst Ratings

Recent ratings for both Telecom Argentina and Orange provide insight into investor sentiment. According to MarketBeat:

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telecom Argentina	2	0	1	0	1.67
Orange	0	1	0	0	2.00

Currently, Telecom Argentina has a consensus target price of $9.13, indicating a possible decline of 22.69%. Analysts seem to view Telecom Argentina with a slightly more optimistic outlook compared to Orange, given its higher expected upside.

Profitability

When examining profitability, we look at key metrics like net margins and returns:

	Net Margins	Return on Equity	Return on Assets
Telecom Argentina	-1.91%	-1.26%	-0.59%
Orange	N/A	N/A	N/A

In terms of profitability, Telecom Argentina currently shows negative margins, meaning it is not profitable at this time.

Valuation and Earnings

Let’s compare the two companies in terms of valuation:

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telecom Argentina	$1,726.35 billion	0.00	-$979.37 million	($0.18)	-65.63
Orange	$43.57 billion	0.73	$2.35 billion	N/A	N/A

Despite having considerably higher gross revenue, Telecom Argentina reports a significant loss, while Orange has healthy earnings.

Risk & Volatility

Examining stock volatility, Telecom Argentina has a beta of 0.92, indicating it is slightly less volatile than the overall market. On the other hand, Orange has a considerably lower beta of 0.24, suggesting it is significantly more stable in comparison to the S&P 500.

Dividends

Dividend payments are another critical factor to consider for investors:

Telecom Argentina offers an annual dividend of $0.29 per share, resulting in a yield of 2.5%. In contrast, Orange pays an annual dividend of $0.42 per share, giving it a higher yield of 3.5%. It's noteworthy that Telecom Argentina’s dividend payout exceeds its earnings by 161.1%, raising concerns about its sustainability.

Institutional and Insider Ownership

Regarding ownership, 12.2% of Orange shares are held by institutional investors, whereas only 1.0% of Telecom Argentina shares are owned by company insiders. Strong institutional ownership can be an indicator of a company’s potential for long-term growth.

Summary

A comparison between the two telecom giants shows that Orange outperforms Telecom Argentina across eight of the fourteen evaluation criteria.

About Telecom Argentina

Telecom Argentina S.A. is a telecommunications provider based in Buenos Aires, Argentina. The company offers a range of mobile and fixed-line services, internet products, and cable television services, among other telecommunications solutions. Established in 1979, it was previously known as Cablevisión S.A. before adopting its current name in January 2018.

About Orange

Orange S.A. is headquartered in Issy-les-Moulineaux, France, and provides various fixed and mobile telecommunications services globally. The company has a rich portfolio, including mobile voice and data services, fixed broadband solutions, and value-added services. Formerly known as France Telecom, it adopted the name Orange S.A. in July 2013 and has been operational since 1991.

telecom, investment, comparison