Reviewing Frontier Communications (OTCMKTS:FTRCQ) and Orange (OTCMKTS:ORAN)

Frontier Communications (OTCMKTS:FTRCQ) and Orange (NYSE:ORAN) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Frontier Communications -75.70% -0.12% 0.03%
Orange N/A N/A N/A

Risk and Volatility

Frontier Communications has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Orange has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500.

Institutional and Insider Ownership

54.1% of Frontier Communications shares are held by institutional investors. Comparatively, 1.0% of Orange shares are held by institutional investors. 1.7% of Frontier Communications shares are held 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.

Earnings and Valuation

This table compares Frontier Communications and Orange’s 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) -0.10
Orange $47.31 billion 0.66 $3.37 billion $1.14 10.36

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

Analyst Ratings

This is a summary of recent recommendations for Frontier Communications and Orange, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontier Communications 0 0 0 0 N/A
Orange 1 4 6 0 2.45

Orange has a consensus target price of $16.00, suggesting a potential upside of 35.48%. Given Orange’s higher probable upside, analysts clearly believe Orange is more favorable than Frontier Communications.

Summary

Orange beats Frontier Communications on 9 of the 13 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 Orange

Orange S.A. provides a range of fixed telephony and mobile telecommunications, data transmission, and other value-added services to consumers, businesses, and other telecommunications operators in Europe, Africa, and the Middle East. The company offers mobile services, such as voice, SMS, and data; fixed broadband and narrowband services, as well as fixed network business solutions, including voice and data; and convergence packages. It also sells mobile phones, broadband equipment, and connected objects and accessories. In addition, the company provides IT and integration services comprising unified communication and collaboration services, such as LAN and telephony, advising, integration, and project management; hosting and infrastructure services, including cloud computing; customer relations management and other applications services; security services; and video conferencing, as well as sells related equipment. Further, it offers national and international roaming services; and mobile virtual network operators, network sharing, and mobile financial services, as well as sells equipment to external distributors and brokers. The company markets its products and services under the Orange brand. Orange S.A. was formerly known as France Telecom and changed its name to Orange S.A. in July 2013. Orange S.A. was founded in 1990 and is headquartered in Paris, France.

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