Contrasting Liberty Global (NASDAQ:LILAK) & Telefonica (NYSE:TEF)

Telefonica (NYSE:TEF) and Liberty Global (NASDAQ:LILAK) are both communication services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Telefonica and Liberty Global, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telefonica	4	2	0	0	1.33
Liberty Global	1	2	0	0	1.67

Telefonica currently has a consensus price target of $4.02, suggesting a potential upside of 5.38%. Liberty Global has a consensus price target of $8.10, suggesting a potential downside of 5.04%. Given Telefonica’s higher possible upside, equities research analysts plainly believe Telefonica is more favorable than Liberty Global.

Institutional & Insider Ownership

1.1% of Telefonica shares are held by institutional investors. Comparatively, 53.0% of Liberty Global shares are held by institutional investors. 0.0% of Telefonica shares are held by company insiders. Comparatively, 9.7% of Liberty Global shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Telefonica has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Liberty Global has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Profitability

This table compares Telefonica and Liberty Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telefonica	-5.23%	8.54%	1.96%
Liberty Global	-2.20%	-8.50%	-0.82%

Valuation and Earnings

This table compares Telefonica and Liberty Global”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telefonica	$40.55 billion	0.53	-$53.02 million	($0.41)	-9.29
Liberty Global	$4.44 billion	0.39	-$611.20 million	($0.49)	-17.41

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

Summary

Telefonica beats Liberty Global on 8 of the 13 factors compared between the two stocks.

About Telefonica

Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Europe and Latin America. The company offers mobile and related services and products, such as mobile voice, value added, mobile data and internet, wholesale, corporate, roaming, fixed wireless, and trunking and paging services. It also provides fixed telecommunication services, including PSTN lines; ISDN accesses; public telephone services; local, domestic, and international long-distance and fixed-to-mobile communications; corporate communications; supplementary value-added services; video telephony; intelligent network; and telephony information services, as well as leases and sells handset equipment and telephony information services. It also provides Internet and broadband multimedia services comprising internet service provider, portal and network, retail and wholesale broadband access, narrowband switched access, security, internet through fibre to the home, and voice over internet protocol services. In addition, the company offers leased line, virtual private network, fibre optics, web hosting and application, managed hosting, content delivery, outsourcing and application, desktop, and system integration and professional services. Further, the company offers wholesale services for telecommunication operators, including domestic interconnection and international wholesale services; leased lines for other operators; and local loop leasing services, as well as bit stream services, wholesale line rental accesses, and leased ducts for other operators' fiber deployment. Additionally, it provides video/TV services; smart connectivity and services, and consumer IoT products; financial and other payment, security, cloud, advertising, big data, and digital experience services; Aura; open gateway, living apps; smart Wi-Fi, Phoenix, NT, Solar 360, and Movistar Home devices. Telefónica, S.A. was incorporated in 1924 and is headquartered in Madrid, Spain.

About Liberty Global

Liberty Latin America Ltd., together with its subsidiaries, provides fixed, mobile, and subsea telecommunications services. The company operates through C&W Caribbean, C&W Panama, Liberty Networks, Liberty Puerto Rico, and Liberty Costa Rico segments. It offers communications and entertainment services, including video, broadband internet, fixed-line, telephony, and mobiles services to residential and business customers; and business products and services that include enterprise-grade connectivity, data center, hosting, and managed solutions, as well as information technology solutions for small and medium enterprises, international companies, and governmental agencies. The company also operates a sub-sea and terrestrial fiber optic cable network that connects approximately 40 markets. It provides its services under the brands of C&W, Liberty Costa Rica, Liberty Communications, BTC, Flow, and Mas Móvil. The company was incorporated in 2017 and is based in Hamilton, Bermuda.