Critical Comparison: Spok (NASDAQ:SPOK) and MTN Group (OTCMKTS:MTNOY)

MTN Group (OTCMKTS:MTNOY) and Spok (NASDAQ:SPOK) are both communication services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Dividends

MTN Group pays an annual dividend of $0.22 per share and has a dividend yield of 1.8%. Spok pays an annual dividend of $1.25 per share and has a dividend yield of 11.4%. Spok pays out 215.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares MTN Group and Spok”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MTN Group	$12.69 billion	1.73	$1.13 billion	N/A	N/A
Spok	$139.71 million	1.64	$15.88 million	$0.58	18.90

MTN Group has higher revenue and earnings than Spok.

Volatility and Risk

MTN Group has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Spok has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.

Institutional & Insider Ownership

50.8% of Spok shares are held by institutional investors. 7.3% of Spok shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for MTN Group and Spok, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MTN Group	1	0	1	0	2.00
Spok	0	2	0	0	2.00

Spok has a consensus target price of $14.00, indicating a potential upside of 27.74%. Given Spok’s higher probable upside, analysts plainly believe Spok is more favorable than MTN Group.

Profitability

This table compares MTN Group and Spok’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MTN Group	N/A	N/A	N/A
Spok	9.00%	8.50%	6.08%

Summary

Spok beats MTN Group on 7 of the 13 factors compared between the two stocks.

About MTN Group

MTN Group Limited, together with its subsidiaries, provides mobile telecommunications services in South Africa, Nigeria, East Africa, West and Central Africa, and the Middle East and North Africa. The company offers data, voice and SMS, digital and fintech, interconnect, and roaming services, as well as sells mobile devices. It also provides network as a service, including subsea cables that offers international connectivity services; terrestrial and metro fiber networks; data centers and cable landing stations; and FTTx, towers, and radio access networks. The company also offers digital financial services, such as access payments, e-commerce, insurance, and lending and remittance services; enterprise services comprising manage networks, unified and cloud communication, security as a service, and Internet of Things; and API products and services for telecommunications, health, government, financial services, entertainment, and other sectors. MTN Group Limited was incorporated in 1994 and is based in Johannesburg, South Africa.

About Spok

Spok Holdings, Inc., through its subsidiary, Spok, Inc., provides healthcare communication solutions in the United States, Europe, Canada, Australia, Asia, and the Middle East. The company's products and services enhance workflows for clinicians and support administrative compliance. It delivers clinical information to care teams when and where it matters to enhance patient outcomes; and provides GenA Pager, a one-way alphanumeric pager. The company offers subscriptions to one-way or two-way messaging services, as well as alphanumeric pagers that are configurable to support unencrypted or encrypted operation; and ancillary services, such as voicemail, and equipment loss or maintenance protection services, as well as sells devices to resellers who lease or resell them to their subscribers. Its Spok Care Connect suite products for contact centers, clinical alerting and notification, mobile communications and messaging, and public safety notifications. In addition, the company provides professional, software license updates, and product support services, as well as sells third-party equipment. It serves businesses, professionals, management personnel, medical personnel, field sales personnel and service forces, members of the construction industry and construction trades, real estate brokers and developers, sales and services organizations, specialty trade organizations, manufacturing organizations, and government agencies. The company was formerly known as USA Mobility, Inc. and changed its name to Spok Holdings, Inc. in July 2014. Spok Holdings, Inc. was founded in 1986 and is headquartered in Alexandria, Virginia.