Critical Contrast: Otelco (NASDAQ:OTEL) and SoftBank Group (OTCMKTS:SFTBY)

SoftBank Group (OTCMKTS:SFTBY) and Otelco (NASDAQ:OTEL) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Volatility & Risk

SoftBank Group has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Otelco has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Insider & Institutional Ownership

0.1% of SoftBank Group shares are held by institutional investors. Comparatively, 10.8% of Otelco shares are held by institutional investors. 7.8% of Otelco shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares SoftBank Group and Otelco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SoftBank Group N/A -2.97% -0.61%
Otelco 11.05% 31.88% 5.53%

Earnings and Valuation

This table compares SoftBank Group and Otelco’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SoftBank Group $56.90 billion 3.64 -$8.85 billion ($2.16) -22.92
Otelco $62.77 million 0.63 $7.80 million $2.27 5.11

Otelco has lower revenue, but higher earnings than SoftBank Group. SoftBank Group is trading at a lower price-to-earnings ratio than Otelco, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for SoftBank Group and Otelco, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SoftBank Group 0 0 2 0 3.00
Otelco 0 0 1 0 3.00

Summary

Otelco beats SoftBank Group on 9 of the 12 factors compared between the two stocks.

About SoftBank Group

SoftBank Group Corp. provides telecommunication services in Japan and internationally. The company operates through four segments: SoftBank Vision Fund and Other SBIA-Managed Funds, SoftBank, Arm, and Brightstar. The SoftBank Vision Fund and Other SBIA-Managed Funds is involved in investment activities. The SoftBank segment offers mobile communications, broadband, and fixed-line communications services; and sells mobile devices, as well as involved in Internet advertising, e-commerce business. The Arm segment designs microprocessor intellectual property and related technology; sells software tools; and offers software services. The Brightstar segment distributes mobile devices. The company provides investment management and payment services; and generates, supplies, and sells electricity from renewable energy sources, as well as marketing activities. In addition, it offers card services; IT solutions; operates, sells, and markets PC software and online games; and distributes video, voice, and data content. The company operates professional baseball team, as well as manages and maintains baseball stadium and other sports facilities. It also operates fashion online shopping website ZOZOTOWN. The company was formerly known as SoftBank Corp. and changed its name to SoftBank Group Corp. in July 2015. SoftBank Group Corp. was founded in 1981 and is headquartered in Tokyo, Japan.

About Otelco

Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. It offers local services, including voice lines that provide local dial tone and calling features, such as caller identification, call waiting, call forwarding, and voicemail; long distance services; billing and payments; and directory advertising services. The company also provides network access services comprising the origination, transportation, and termination of calls of long distance, wireless, and other interexchange carriers; digital high-speed data lines and ancillary services, such as web hosting and computer virus protection; and basic, digital, high-definition, digital video recording, and pay per view cable television services. In addition, it offers Internet protocol television; wireless security systems and system monitoring services; and private/hybrid cloud hosting services, as well as consulting and professional IT engineering services for mission-critical software applications for small and mid-sized companies. Further, the company rents fiber to transport data and other telecommunications services. It primarily serves business and residential customers residing in and adjacent to the exchanges in Alabama, Maine, Massachusetts, Missouri, Vermont, and West Virginia; and business customers in Maine and New Hampshire. The company was founded in 1998 and is based in Oneonta, Alabama.

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