Analyzing Telus (TU) & Cellcom Israel (CEL)

Telus (NYSE: TU) and Cellcom Israel (NYSE:CEL) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Analyst Ratings

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This is a breakdown of recent recommendations for Telus and Cellcom Israel, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telus 0 2 6 0 2.75
Cellcom Israel 1 0 0 0 1.00

Telus presently has a consensus price target of $46.17, suggesting a potential upside of 31.12%. Given Telus’ stronger consensus rating and higher possible upside, equities analysts plainly believe Telus is more favorable than Cellcom Israel.

Dividends

Telus pays an annual dividend of $1.61 per share and has a dividend yield of 4.6%. Cellcom Israel does not pay a dividend. Telus pays out 79.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telus has raised its dividend for 2 consecutive years.

Risk and Volatility

Telus has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Cellcom Israel has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500.

Profitability

This table compares Telus and Cellcom Israel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telus 10.94% 18.78% 5.36%
Cellcom Israel 2.92% 8.02% 1.84%

Insider and Institutional Ownership

51.8% of Telus shares are held by institutional investors. Comparatively, 10.4% of Cellcom Israel shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Telus and Cellcom Israel’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telus $10.26 billion 2.04 $1.13 billion $2.03 17.34
Cellcom Israel $1.12 billion 0.61 $33.00 million N/A N/A

Telus has higher revenue and earnings than Cellcom Israel.

Summary

Telus beats Cellcom Israel on 12 of the 15 factors compared between the two stocks.

About Telus

TELUS Corporation, together with its subsidiaries, provides a range of telecommunications products and services in Canada. It operates through Wireless and Wireline segments. The company's telecommunications products and services comprise wireless and wireline voice and data services; data services, including Internet protocol; television services; hosting, managed information technology, and security and cloud-based services; healthcare solutions; business process outsourcing; and security solutions. It has 13 million subscriber connections, including 8.9 million wireless subscribers, 1.7 million high-speed Internet subscribers, 1.3 million wireline residential network access lines, and 1.1 million TELUS TV subscribers. The company was formerly known as TELUS Communications Inc. and changed its name to TELUS Corporation in February 2005. TELUS Corporation was founded in 1993 and is based in Vancouver, Canada.

About Cellcom Israel

Cellcom Israel Ltd. provides cellular and landline telecommunications services in Israel. It operates through two segments, Cellular and Fixed-line. The company offers basic cellular telephony services, such as voice mail, cellular fax, call waiting, call forwarding, caller identification, conference calling, and inbound and outbound roaming services; and data transfer, and upload and download services. It also provides value-added services comprising SMS and MMS services; cloud backup content services, including Cellcom Volume music application and Cellcom TV application; text and multimedia messaging services; and advanced cellular content services. In addition, the company sells handsets, modems, tablets, and laptops, as well as offers repair services. Further, it provides transmission and data services through approximately 1,800 kilometers of inland fiber-optic infrastructure and complementary microwave links to selected business customers. Additionally, the company offers Internet connectivity and related services; international calling services, operator services, teleconferencing services, international long distance services, and landline telephony services; and cloud services and data security products. As of December 31, 2016, it had approximately 10.2 million cellular subscribers. Cellcom Israel Ltd. was founded in 1994 and is headquartered in Netanya, Israel.

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