Head to Head Review: Frontier Communications (FTR) and Swisscom (SCMWY)

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Frontier Communications (NASDAQ:FTR) and Swisscom (OTCMKTS:SCMWY) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Dividends

Swisscom pays an annual dividend of $1.47 per share and has a dividend yield of 3.1%. Frontier Communications does not pay a dividend. Swisscom pays out 48.8% of its earnings in the form of a dividend. Frontier Communications has raised its dividend for 2 consecutive years.

Earnings and Valuation

This table compares Frontier Communications and Swisscom’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Frontier Communications $9.13 billion 0.03 -$1.80 billion ($1.34) -2.01
Swisscom $11.98 billion 2.03 $1.56 billion $3.01 15.59

Swisscom has higher revenue and earnings than Frontier Communications. Frontier Communications is trading at a lower price-to-earnings ratio than Swisscom, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Frontier Communications and Swisscom, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontier Communications 5 4 0 0 1.44
Swisscom 1 1 0 0 1.50

Frontier Communications currently has a consensus target price of $3.58, suggesting a potential upside of 33.04%. Given Frontier Communications’ higher probable upside, equities analysts plainly believe Frontier Communications is more favorable than Swisscom.

Institutional & Insider Ownership

72.0% of Frontier Communications shares are owned by institutional investors. Comparatively, 0.1% of Swisscom shares are owned by institutional investors. 2.3% of Frontier Communications shares are owned by insiders. Comparatively, 1.0% of Swisscom shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Frontier Communications has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Swisscom has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500.

Profitability

This table compares Frontier Communications and Swisscom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Frontier Communications -16.69% -2.35% -0.22%
Swisscom 13.03% 18.74% 6.66%

Summary

Swisscom beats Frontier Communications on 10 of the 16 factors compared between the two stocks.

About Frontier Communications

Frontier Communications Corporation provides communications services to consumer, commercial, and wholesale customers in the United States. It offers broadband, video, voice, and other services and products through a combination of fiber and copper based networks to consumer customers. The company also provides broadband, Ethernet, traditional circuit-based, and voice services; and software defined wide area network, multiprotocol label switching, and time division multiplexing data transport and optical transport services to small, medium, and large enterprises, as well as advanced hardware and network solutions and services, and customer premise equipment. In addition, it offers 24/7 technical support; wireless broadband services in selected markets; satellite TV video services; voice services, including data-based VoIP, and long distance and voice messaging services; and a package of communications services. Further, the company provides a range of access services that allow other carriers to use facilities to originate and terminate their local and long distance voice traffic. As of December 31, 2017, it served approximately 4.9 million customers and 3.9 million broadband subscribers in 29 states. The company was formerly known as Citizens Communications Company and changed its name to Frontier Communications Corporation in July 2008. Frontier Communications Corporation was founded in 1927 and is based in Norwalk, Connecticut.

About Swisscom

Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally. The company operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. It offers broadband, TV, fixed-network, and mobile phone subscription services, as well as national and international telephone, and data traffic services for residential customers, and small and medium-sized enterprises. The company also provides cloud, outsourcing, workplace, UCC, mobile phone, networking, business process optimization, SAP, and security and authentication solutions, as well as a range of services to the banking industry; Internet of Things solutions; digitization services to the healthcare sector; IT systems for health insurance companies; fixed and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products. In addition, it plans, operates, and maintains network infrastructure and IT systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband services, such as voice, data, and TV services, as well as video-on-demand for residential and corporate customers. Further, the company provides mobile phone services; IT and network services, and customized solutions; and online and telephone directories, as well as sells merchandise products. Additionally, it offers collection services for radio and TV license fees; and cross-platform retail media and security communication services, as well as constructs and maintains wired and wireless networks. Swisscom AG was founded in 1998 and is headquartered in Bern, Switzerland.

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