Oi (NYSE: OIBR) shares currently have a dividend yield of 8.40%. Oi S.A., through its subsidiaries, provides integrated telecommunication service for residential customers, companies, and governmental agencies in Brazil. Currently there are no analysts that rate Oi a buy, 3 analysts rate it a sell, and 3 rate it a hold. The average volume for Oi has been 3,238,600 shares per day over the past 30 days. Oi has a market cap of $5.0 billion and is part of the telecommunications industry. Shares are down 26.9% year to date as of the close of trading on Wednesday. TheStreet Ratings rates Oi as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- OI SA has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, OI SA reported lower earnings of $0.45 versus $0.92 in the prior year. For the next year, the market is expecting a contraction of 89.0% in earnings ($0.05 versus $0.45).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has significantly decreased by 28.1% when compared to the same quarter one year ago, falling from $71.96 million to $51.71 million.
- Currently the debt-to-equity ratio of 1.68 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, OIBR maintains a poor quick ratio of 0.91, which illustrates the inability to avoid short-term cash problems.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 55.41%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 75.66% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 40.20% is the gross profit margin for OI SA which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year.
- You can view the full Oi Ratings Report.
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