Critical Comparison: Frontier Communications (OTCMKTS:FTRCQ) versus PLDT (OTCMKTS:PHI)

Frontier Communications (OTCMKTS:FTRCQ) and PLDT (NYSE:PHI) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Frontier Communications $8.11 billion 0.00 -$5.91 billion ($0.92) -0.19
PLDT $3.32 billion 1.84 $434.65 million $2.28 12.41

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

Profitability

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

Net Margins Return on Equity Return on Assets
Frontier Communications -11.39% -0.12% -0.14%
PLDT 13.01% 22.79% 4.91%

Analyst Ratings

This is a breakdown of recent ratings for Frontier Communications and PLDT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontier Communications 0 0 0 0 N/A
PLDT 0 1 2 0 2.67

Institutional and Insider Ownership

3.1% of Frontier Communications shares are held by institutional investors. Comparatively, 3.8% of PLDT shares are held by institutional investors. 1.7% of Frontier Communications shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Frontier Communications has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, PLDT has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

Summary

PLDT beats Frontier Communications on 9 of the 12 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 Ethernet and traditional circuit-based services; software defined wide area network, managed Wi-Fi and cloud IT solutions, voice and Unified Communications as a Service (UCaaS), and Voice over Internet Protocol (VoIP) services, as well as hardware and network solutions and services to small and medium business, and large enterprises. In addition, it offers data and Internet services; wireless broadband services; satellite TV video services; voice services, including data-based VoIP, UCaaS, 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. It serves approximately 4.1 million customers and 3.5 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 1935 and is based in Norwalk, Connecticut. On April 14, 2020, Frontier Communications Corporation, along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.

About PLDT

PLDT Inc. operates as a telecommunications company in the Philippines. The company operates in three segments: Wireless, Fixed Line, and Others. The Wireless segment offers cellular mobile, Internet broadband distribution, operations support, software development, and satellite information and messaging services; and sells Wi-Fi access equipment. As of December 31, 2018, it served 60,499,017 wireless subscribers. The Fixed Line segment provides fixed line telecommunications services; business infrastructure and solutions; intelligent data processing and implementation, and data analytics insight generation services; and information and communications infrastructure for Internet-based services, e-commerce, customer relationship management, and information technology (IT) related services. It also offers managed IT outsourcing, Internet-based purchasing, IT consulting and professional, bills printing and other related value-added, and air transportation services, as well as distributes Filipino channels and content services. As of December 31, 2018, it had 2,710,972 fixed line subscribers. The Others segment develops and maintains IT-based solutions for communications and e-commerce platforms; develops mobile applications, digital platforms, and financial technology solutions; provides mobile payment, and solutions and systems integration services, as well as insurance products; markets, sells, and distributes payment solutions and other related services. PLDT Inc. also serves 2,025,563 broadband subscribers. The company has a strategic partnership with Rocket Internet SE to develop online and mobile payment solutions. The company was formerly known as Philippine Long Distance Telephone Company and changed its name to PLDT Inc. in July 2016. PLDT Inc. was founded in 1928 and is based in Makati City, the Philippines.

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