Reviewing Atento (NYSE:ATTO) & Centurylink (NYSE:CTL)

Atento (NYSE:ATTO) and Centurylink (NYSE:CTL) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Analyst Recommendations

This is a breakdown of current recommendations for Atento and Centurylink, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atento 0 1 2 0 2.67
Centurylink 2 6 2 0 2.00

Atento currently has a consensus price target of $5.50, suggesting a potential upside of 89.66%. Centurylink has a consensus price target of $13.06, suggesting a potential downside of 11.70%. Given Atento’s stronger consensus rating and higher probable upside, research analysts plainly believe Atento is more favorable than Centurylink.

Valuation and Earnings

This table compares Atento and Centurylink’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atento $1.82 billion 0.12 $18.54 million $0.77 3.77
Centurylink $23.44 billion 0.69 -$1.73 billion $1.19 12.43

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

Volatility & Risk

Atento has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Centurylink has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Profitability

This table compares Atento and Centurylink’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atento -2.03% 9.19% 2.17%
Centurylink -34.77% 8.30% 2.13%

Institutional & Insider Ownership

79.0% of Atento shares are held by institutional investors. Comparatively, 73.5% of Centurylink shares are held by institutional investors. 0.5% of Centurylink shares are held by 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.

Dividends

Centurylink pays an annual dividend of $1.00 per share and has a dividend yield of 6.8%. Atento does not pay a dividend. Centurylink pays out 84.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Atento beats Centurylink on 8 of the 15 factors compared between the two stocks.

Atento Company Profile

Atento S.A., together with its subsidiaries, provides customer relationship management and business process outsourcing services and solutions in Brazil, the Americas, Europe, the Middle East, and Africa. It offers a range of front and back-end services, including sales, customer care, collections, back office, applications-processing, credit-management, and technical support services. The company serves clients primarily in the telecommunications and financial services sectors; and in multi-sectors, including consumer goods, retail, public administration, healthcare, travel, and transportation and logistics, as well as technology and media. It provides its services and solutions through digital channels, which include SMS, email, chats, social media and apps, and others, as well as through voice and in-person. The company was formerly known as Atento Floatco S.A. Atento S.A. was founded in 1999 and is based in Findel, Luxembourg.

Centurylink Company Profile

CenturyLink, Inc. provides various communications services to residential, business, wholesale, and governmental customers in the United States and internationally. The company operates in two segments, Business and Consumer. It offers VPN data network services; Ethernet services; Internet protocol (IP) services; facilities-based Prism TV service, as well as satellite digital television services; CDN services; and Vyvx broadcast services. The company also provides broadband services, which allow customers to connect to the Internet through their existing telephone lines or fiber-optic cables; private line services for transmission of data between sites; wavelength services; and colocation and data center services, such as hosting, cloud, and managed solutions. In addition, it offers network management, installation and maintenance of data equipment, and building of fiber-optic broadband networks; professional services; and network security services, as well as sells equipment. Further, the company offers voice services; voice over IP services; and managed services comprising network, hosting, cloud, and information technology services, as well as leases and subleases space in its office buildings, warehouses, and other properties. As of December 31, 2018, it served approximately 4.8 million broadband subscribers. CenturyLink, Inc. was founded in 1968 and is based in Monroe, Louisiana.

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