Critical Analysis: GTT Communications (OTCMKTS:GTTN) versus Telefónica (NYSE:TEF)

GTT Communications (OTCMKTS:GTTN) and Telefónica (NYSE:TEF) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Volatility and Risk

GTT Communications has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Telefónica has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Profitability

This table compares GTT Communications and Telefónica’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GTT Communications	N/A	N/A	N/A
Telefónica	-1.62%	9.18%	2.42%

Analyst Ratings

This is a summary of recent ratings and recommmendations for GTT Communications and Telefónica, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GTT Communications	0	0	0	0	N/A
Telefónica	1	4	0	0	1.80

Institutional & Insider Ownership

45.6% of GTT Communications shares are owned by institutional investors. Comparatively, 1.1% of Telefónica shares are owned by institutional investors. 46.4% of GTT Communications shares are owned by insiders. Comparatively, 0.0% of Telefónica shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares GTT Communications and Telefónica”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GTT Communications	$1.73 billion	0.00	-$105.90 million	N/A	N/A
Telefónica	$43.99 billion	0.60	-$965.41 million	($0.16)	-29.19

GTT Communications has higher earnings, but lower revenue than Telefónica.

Summary

GTT Communications beats Telefónica on 5 of the 8 factors compared between the two stocks.

About GTT Communications

GTT Communications, Inc. engages in the provision of cloud networking services to multinational clients. It offers broad portfolio of global services including private networking; Internet; optical transport; Software Defined Wide Area Networking; managed services; voice and unified communications; video transport; and access services. The company was founded by H. Brian Thompson on January 3, 2005 and is headquartered in McLean, VA.

About Telefónica

Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Europe and Latin America. The company offers mobile and related services and products, such as mobile voice, value added, mobile data and internet, wholesale, corporate, roaming, fixed wireless, and trunking and paging services. It also provides fixed telecommunication services, including PSTN lines; ISDN accesses; public telephone services; local, domestic, and international long-distance and fixed-to-mobile communications; corporate communications; supplementary value-added services; video telephony; intelligent network; and telephony information services, as well as leases and sells handset equipment and telephony information services. It also provides Internet and broadband multimedia services comprising internet service provider, portal and network, retail and wholesale broadband access, narrowband switched access, security, internet through fibre to the home, and voice over internet protocol services. In addition, the company offers leased line, virtual private network, fibre optics, web hosting and application, managed hosting, content delivery, outsourcing and application, desktop, and system integration and professional services. Further, the company offers wholesale services for telecommunication operators, including domestic interconnection and international wholesale services; leased lines for other operators; and local loop leasing services, as well as bit stream services, wholesale line rental accesses, and leased ducts for other operators' fiber deployment. Additionally, it provides video/TV services; smart connectivity and services, and consumer IoT products; financial and other payment, security, cloud, advertising, big data, and digital experience services; Aura; open gateway, living apps; smart Wi-Fi, Phoenix, NT, Solar 360, and Movistar Home devices. Telefónica, S.A. was incorporated in 1924 and is headquartered in Madrid, Spain.