Atento (ATTO) and Consolidated Communications (CNSL) Financial Survey

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Atento (NASDAQ: CNSL) and Consolidated Communications (NASDAQ:CNSL) are both small-cap business services companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Analyst Recommendations

This is a summary of recent ratings for Atento and Consolidated Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atento 0 1 2 0 2.67
Consolidated Communications 0 3 1 0 2.25

Atento presently has a consensus target price of $11.50, suggesting a potential upside of 51.32%. Consolidated Communications has a consensus target price of $14.67, suggesting a potential upside of 26.33%. Given Atento’s stronger consensus rating and higher probable upside, equities analysts clearly believe Atento is more favorable than Consolidated Communications.

Earnings and Valuation

This table compares Atento and Consolidated Communications’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atento $1.92 billion 0.29 -$16.79 million $0.75 10.13
Consolidated Communications $1.06 billion 0.78 $64.94 million $0.26 44.65

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

Profitability

This table compares Atento and Consolidated Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atento -1.06% 14.95% 4.16%
Consolidated Communications 3.47% -3.15% -0.45%

Dividends

Atento pays an annual dividend of $0.34 per share and has a dividend yield of 4.5%. Consolidated Communications pays an annual dividend of $1.55 per share and has a dividend yield of 13.4%. Atento pays out 45.3% of its earnings in the form of a dividend. Consolidated Communications pays out 596.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

92.5% of Atento shares are owned by institutional investors. Comparatively, 71.3% of Consolidated Communications shares are owned by institutional investors. 2.4% of Consolidated Communications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Atento has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500. Comparatively, Consolidated Communications has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Summary

Atento beats Consolidated Communications on 9 of the 16 factors compared between the two stocks.

About Atento

Atento S.A., together with its subsidiaries, provides customer relationship management and business process outsourcing services and solutions in Brazil, the Americas, Europe, the Middle East, and Africa. It offers a range of front and back-end services, including sales, customer care, collections, back office, applications-processing, credit-management, and technical support services. The company serves clients primarily in the telecommunications and financial services sectors; and in multi-sectors, including consumer goods, retail, public administration, healthcare, travel, and transportation and logistics, as well as technology and media. It provides its services and solutions through digital channels, which include SMS, email, chats, social media and apps, and others, as well as through voice and in-person. The company was formerly known as Atento Floatco S.A. Atento S.A. was founded in 1999 and is based in Findel, Luxembourg.

About Consolidated Communications

Consolidated Communications Holdings, Inc., through its subsidiaries, provides various integrated communications services to business and residential customers in the United States. It offers a range of communication services and products that include local and long-distance, high-speed broadband Internet access, video, voice over Internet protocol, private line, custom calling features, security, cloud, data center, managed and IT, and directory publishing services, as well as engages in equipment sales activities. The company also sells and supports telecommunications equipment, such as key, private branch exchange, IP-based telephone systems, and other hardware solutions, as well as offers support services to medium and large business customers. As of December 31, 2017, it had approximately 972 thousand voice connections, 784 thousand data connections, and 103 thousand video connections. The company serves customers in consumer, commercial, and carrier channels. Consolidated Communications Holdings, Inc. was founded in 1894 and is headquartered in Mattoon, Illinois.

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