Oi (NYSE: OIBR) shares currently have a dividend yield of 12.10%. Oi S.A., through its subsidiaries, provides integrated telecommunication services for residential customers, companies, and governmental agencies in Brazil. It operates in three segments: Fixed-Line and Data Transmission Services, Mobile Services, and Other Services. The average volume for Oi has been 4,437,900 shares per day over the past 30 days. Oi has a market cap of $3.8 billion and is part of the telecommunications industry. Shares are down 46.6% year to date as of the close of trading on Monday. 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 $0.79 versus $0.92 in the prior year. For the next year, the market is expecting a contraction of 73.5% in earnings ($0.21 versus $0.79).
- 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 144.8% when compared to the same quarter one year ago, falling from $149.93 million to -$67.23 million.
- The debt-to-equity ratio is very high at 3.28 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, OIBR has a quick ratio of 0.63, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 49.89%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 144.44% 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.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, OI SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Oi Ratings Report.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts