Critical Analysis: Shaw Communications (OTCMKTS:SJRWF) & Bandwidth (NASDAQ:BAND)

Bandwidth (NASDAQ:BAND) and Shaw Communications (OTCMKTS:SJRWF) are both communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Profitability

This table compares Bandwidth and Shaw Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bandwidth	0.27%	1.85%	0.70%
Shaw Communications	N/A	N/A	N/A

Analyst Ratings

This is a summary of current ratings and price targets for Bandwidth and Shaw Communications, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bandwidth	0	2	5	0	2.71
Shaw Communications	0	0	0	0	0.00

Bandwidth presently has a consensus target price of $61.75, suggesting a potential upside of 17.15%. Given Bandwidth’s stronger consensus rating and higher possible upside, analysts plainly believe Bandwidth is more favorable than Shaw Communications.

Valuation & Earnings

This table compares Bandwidth and Shaw Communications”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bandwidth	$753.82 million	2.25	-$12.91 million	($0.29)	-181.76
Shaw Communications	N/A	N/A	N/A	$1.82	16.49

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

Insider and Institutional Ownership

68.5% of Bandwidth shares are held by institutional investors. 5.3% of Bandwidth shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Bandwidth beats Shaw Communications on 9 of the 11 factors compared between the two stocks.

About Bandwidth

Bandwidth is a leading enterprise cloud communications company. Companies like Cisco, Google, Microsoft, RingCentral, Uber, and Zoom use Bandwidth’s APIs to easily embed voice, messaging, and emergency services into software and applications. Bandwidth is the first and only CPaaS provider offering a robust selection of communications APIs built around their own IP voice network.

About Shaw Communications

Shaw Communications Inc. operates as a connectivity company in North America. The company's Wireline segment provides cable telecommunications services, including video, Internet, WiFi, phone, satellite video, and data networking through a national fibre-optic backbone network to Canadian consumers, North American businesses, and public-sector entities. Its Wireless segment provides wireless services for voice and data communications serving customers in Ontario, British Columbia, and Alberta through Freedom Mobile; and in British Columbia and Alberta through Shaw Mobile. The company was formerly known as Shaw Cablesystems Ltd. and changed its name to Shaw Communications Inc. in May 1993. Shaw Communications Inc. was incorporated in 1966 and is headquartered in Calgary, Canada.