Critical Analysis: Koninklijke KPN (OTCMKTS:KKPNY) vs. GTT Communications (GTT)

Koninklijke KPN (OTCMKTS:KKPNY) and GTT Communications (NYSE:GTT) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

0.1% of Koninklijke KPN shares are held by institutional investors. Comparatively, 85.4% of GTT Communications shares are held by institutional investors. 40.8% of GTT Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Koninklijke KPN and GTT Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Koninklijke KPN 0 1 1 0 2.50
GTT Communications 1 1 6 0 2.63

GTT Communications has a consensus price target of $41.00, indicating a potential upside of 57.45%. Given GTT Communications’ stronger consensus rating and higher possible upside, analysts clearly believe GTT Communications is more favorable than Koninklijke KPN.

Dividends

Koninklijke KPN pays an annual dividend of $0.15 per share and has a dividend yield of 5.1%. GTT Communications does not pay a dividend.

Profitability

This table compares Koninklijke KPN and GTT Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Koninklijke KPN N/A N/A N/A
GTT Communications -14.28% -16.23% -1.51%

Volatility & Risk

Koninklijke KPN has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500. Comparatively, GTT Communications has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.

Earnings & Valuation

This table compares Koninklijke KPN and GTT Communications’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Koninklijke KPN $7.34 billion 1.68 $545.93 million N/A N/A
GTT Communications $1.49 billion 0.98 -$243.40 million ($1.59) -16.38

Koninklijke KPN has higher revenue and earnings than GTT Communications.

Summary

Koninklijke KPN beats GTT Communications on 7 of the 13 factors compared between the two stocks.

About Koninklijke KPN

Koninklijke KPN N.V. provides telecommunications and information technology (IT) services in the Netherlands. It offers fixed and mobile telephony, broadband Internet, and television services to retail consumers; network related IT solutions to business customers; and wholesale network services to third parties. The company provides services in the areas of communication, information, entertainment, and commercial services; a range of end-to-end solutions in infrastructure, workspace management, and security cloud services for small, medium-sized, and large corporate enterprises; and connectivity solutions to fixed and mobile wholesale partners. It also offers cyber security services; specialized VPN and network solutions; and various IT services to the healthcare and public sector. In addition, the company provides Internet hosting services, such as domain registration, shared hosting, VPS, email hosting, Office 365, and online storage services; wide area network and local area network services; colocation services through its data centers; and cloud, security, alert systems, and monitoring services, as well as delivers managed voice, video, and chat services to its business clients based on Microsoft's Skype for Business software. Koninklijke KPN N.V. was founded in 1881 and is headquartered in Rotterdam, the Netherlands.

About GTT Communications

GTT Communications, Inc. provides cloud networking services to multinational enterprises, carriers, and government customers in the United States, Europe, and internationally. The company offers private, public, and hybrid cloud network solutions; high bandwidth-Internet connectivity and IP transit, as well as broadband and wireless Internet access services; managed equipment, security, and hosting services; and voice services consisting of session initiation protocol trunking and hosted private branch exchange services. It also provides transport and infrastructure services enabling cloud-based applications and the transport of high volume data between data centers, enterprise office locations, and media hubs; video transport services to support broadcast quality transmission of live events, sports entertainment, and news to media and entertainment industry; wavelength services to deliver scalable high-performance optical connectivity; Ethernet services that enable to design network equipment; and colocation, turnkey, duct, and dark fiber services. The company's IP network consists of approximately 600 points of presence. GTT Communications, Inc. markets its products and services through a network of direct sales force and indirect sales channels. The company was formerly known as Global Telecom & Technology, Inc. and changed its name to GTT Communications, Inc. in January 2014. GTT Communications, Inc. was founded in 2005 and is headquartered in McLean, Virginia.

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