Reviewing Neustar (NSR) and Cincinnati Bell (CBB)

Neustar (NYSE: NSR) and Cincinnati Bell (NYSE:CBB) are both small-cap companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.

Institutional & Insider Ownership

88.8% of Neustar shares are held by institutional investors. Comparatively, 82.1% of Cincinnati Bell shares are held by institutional investors. 2.9% of Neustar shares are held by insiders. Comparatively, 1.4% of Cincinnati Bell shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Neustar and Cincinnati Bell, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neustar 0 2 0 0 2.00
Cincinnati Bell 2 2 1 0 1.80

Neustar currently has a consensus price target of $29.00, suggesting a potential downside of 13.43%. Cincinnati Bell has a consensus price target of $23.50, suggesting a potential upside of 16.92%. Given Cincinnati Bell’s higher possible upside, analysts clearly believe Cincinnati Bell is more favorable than Neustar.

Profitability

This table compares Neustar and Cincinnati Bell’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neustar 15.50% 19.28% 8.80%
Cincinnati Bell 4.13% -2.69% 0.46%

Earnings and Valuation

This table compares Neustar and Cincinnati Bell’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Neustar N/A N/A N/A $3.27 10.24
Cincinnati Bell $1.19 billion 0.72 $102.10 million $0.94 21.38

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

Summary

Neustar beats Cincinnati Bell on 7 of the 10 factors compared between the two stocks.

About Neustar

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

About Cincinnati Bell

Cincinnati Bell Inc., along with its subsidiaries, provides diversified telecommunications and technology services. The Company operates through two segments: Entertainment and Communications, and IT Services and Hardware. Through its Entertainment and Communications segment, the Company provides high-speed data, video and voice solutions to consumers and businesses over fiber network and a legacy copper network. The IT Services and Hardware segments operates through its subsidiary, Cincinnati Bell Technology Solutions Inc. (CBTS), which is engaged in the sale and service of end-to-end communications and information technology (IT) systems and solutions for business customers across the United States. The Company has interest in CyrusOne Inc., which operates carrier-neutral data center colocation business.

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