Comparing AT&T (NYSE:T) and Bezeq The Israel Telecommunication (OTCMKTS:BZQIF)

AT&T (NYSE:T) and Bezeq The Israel Telecommunication (OTCMKTS:BZQIF) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for AT&T and Bezeq The Israel Telecommunication, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AT&T	1	6	11	1	2.63
Bezeq The Israel Telecommunication	0	0	0	0	0.00

AT&T presently has a consensus price target of $29.19, suggesting a potential upside of 11.30%. Given AT&T’s stronger consensus rating and higher possible upside, analysts clearly believe AT&T is more favorable than Bezeq The Israel Telecommunication.

Dividends

AT&T pays an annual dividend of $1.11 per share and has a dividend yield of 4.2%. Bezeq The Israel Telecommunication pays an annual dividend of $0.23 per share and has a dividend yield of 10.2%. AT&T pays out 36.8% of its earnings in the form of a dividend. Bezeq The Israel Telecommunication pays out 31.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bezeq The Israel Telecommunication is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

57.1% of AT&T shares are owned by institutional investors. Comparatively, 21.5% of Bezeq The Israel Telecommunication shares are owned by institutional investors. 0.1% of AT&T shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares AT&T and Bezeq The Israel Telecommunication’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AT&T	16.94%	12.86%	3.84%
Bezeq The Israel Telecommunication	N/A	N/A	N/A

Valuation & Earnings

This table compares AT&T and Bezeq The Israel Telecommunication”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AT&T	$125.65 billion	1.43	$21.95 billion	$3.02	8.68
Bezeq The Israel Telecommunication	N/A	N/A	N/A	$0.75	3.08

AT&T has higher revenue and earnings than Bezeq The Israel Telecommunication. Bezeq The Israel Telecommunication is trading at a lower price-to-earnings ratio than AT&T, indicating that it is currently the more affordable of the two stocks.

Summary

AT&T beats Bezeq The Israel Telecommunication on 12 of the 14 factors compared between the two stocks.

About AT&T

AT&T, Inc. is a holding company, which engages in the provision of telecommunications and technology services. It operates through the Communications and Latin America segments. The Communications segment offers wireless, wireline telecom, and broadband services to businesses and consumers located in the US and businesses globally. The Latin America segment provides wireless services and equipment in Mexico. The company was founded in 1983 and is headquartered in Dallas, TX.

About Bezeq The Israel Telecommunication

Bezeq The Israel Telecommunication Corp. Ltd provides communications services to business and private customers in Israel. It operates through Domestic fixed-line communications, Cellular Communication, Internet, International Communication, and ICT Solutions, and Multi-Channel Television segments. The company offers telephony services, including basic telephony services on the household telephone line, as well as associated services, such as voice mail and caller ID; national numbering services; and transmission and data-communication services. In addition, it provides virtual server services; Bcyber services; smart business services; private virtual PBX services; and B144 service, an advertising platform for digital advertising and marketing to small businesses, BCam, Wi-Fi, SMS, and remote backup. Further, the company offers infrastructure services, company's network connection, billing services, and space leasing; and operates and maintains radio transmitters for broadcasting of radio and television contents. Additionally, it provides basic telephone, browsing and data communications, messaging, push to talk, Internet of Things, and servicing and repair services, as well as sells terminal equipment. Furthermore, the company provides cellular communication services; multi-channel digital satellite television, over the Internet, and value added services. The company was founded in 1980 and is based in Holon, Israel.