NasdaqCM:OTEL

Stock Analysis Report

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Executive Summary

Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. More Details


Snowflake Analysis

Good value with mediocre balance sheet.


Similar Companies

Share Price & News

How has Otelco's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: OTEL is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 1% a week.

Volatility Over Time: OTEL's weekly volatility has decreased from 15% to 1% over the past year.


Market Performance


7 Day Return

0.6%

OTEL

-1.4%

US Telecom

-0.5%

US Market


1 Year Return

-1.7%

OTEL

-10.8%

US Telecom

18.3%

US Market

Return vs Industry: OTEL exceeded the US Telecom industry which returned -11.6% over the past year.

Return vs Market: OTEL underperformed the US Market which returned 19.1% over the past year.


Shareholder returns

OTELIndustryMarket
7 Day0.6%-1.4%-0.5%
30 Day0.5%3.4%3.6%
90 Day0.3%-1.6%5.6%
1 Year-1.7%-1.7%-6.0%-10.8%21.0%18.3%
3 Year-3.7%-3.7%16.8%0.1%45.2%35.6%
5 Year66.3%66.3%27.1%-1.5%89.8%68.8%

Long-Term Price Volatility Vs. Market

How volatile is Otelco's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Otelco undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OTEL ($11.51) is trading below our estimate of fair value ($28.17)

Significantly Below Fair Value: OTEL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: OTEL is good value based on its PE Ratio (5.7x) compared to the US Telecom industry average (10.3x).

PE vs Market: OTEL is good value based on its PE Ratio (5.7x) compared to the US market (19.2x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate OTEL's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: OTEL is overvalued based on its PB Ratio (1.7x) compared to the US Telecom industry average (1.2x).


Next Steps

Future Growth

How is Otelco forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

11.0%

Forecasted Telecom industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Otelco has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Otelco performed over the past 5 years?

6.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OTEL has high quality earnings.

Growing Profit Margin: OTEL's current net profit margins (11%) are lower than last year (12.7%).


Past Earnings Growth Analysis

Earnings Trend: OTEL's earnings have grown by 6% per year over the past 5 years.

Accelerating Growth: OTEL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: OTEL had negative earnings growth (-14.8%) over the past year, making it difficult to compare to the Telecom industry average (16.5%).


Return on Equity

High ROE: Whilst OTEL's Return on Equity (28.84%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Otelco's financial position?


Financial Position Analysis

Short Term Liabilities: OTEL's short term assets ($19.3M) exceed its short term liabilities ($13.5M).

Long Term Liabilities: OTEL's short term assets ($19.3M) do not cover its long term liabilities ($89.9M).


Debt to Equity History and Analysis

Debt Level: OTEL's debt to equity ratio (290.2%) is considered high.

Reducing Debt: OTEL had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: OTEL's debt is well covered by operating cash flow (24.8%).

Interest Coverage: OTEL's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Otelco current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate OTEL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate OTEL's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if OTEL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if OTEL's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of OTEL's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

12.2yrs

Average management tenure


CEO

Richard Clark (55 yo)

0.83

Tenure

US$404,925

Compensation

Mr. Richard Allen Clark serves as Chief Executive Officer at Otelco Inc. since January 1, 2020. He serves as President at Otelco Inc. since May 1, 2019. He has been Chief Executive Officer and Director of ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD404.93K) is about average for companies of similar size in the US market ($USD562.78K).

Compensation vs Earnings: Richard's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Richard Clark
CEO, President & Director0.83yrUS$404.93kno data
Curtis Garner
Secretary & CFO16.75yrsUS$373.42k1.09%
$ 427.6k
Trina Bragdon
General Counsel7.67yrsno datano data
Jerry Boles
Senior VP & Controller21.83yrsUS$232.07k0.48%
$ 187.6k

12.2yrs

Average Tenure

68yo

Average Age

Experienced Management: OTEL's management team is seasoned and experienced (12.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Clark
CEO, President & Director0.83yrUS$404.93kno data
Stephen McCall
Independent Chairman of the Board7.42yrsUS$95.00k0.29%
$ 113.9k
Howard Haug
Independent Director15.92yrsUS$88.50k0.24%
$ 93.7k
Brian Ross
Independent Director7.5yrsUS$73.00k0.34%
$ 133.0k
Barbara Dondiego-Stewart
Independent Director1.5yrsUS$51.50k0.025%
$ 9.8k
Dayton Judd
Independent Director1.5yrsUS$51.00k0.084%
$ 32.9k

4.5yrs

Average Tenure

52yo

Average Age

Experienced Board: OTEL's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Otelco Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Otelco Inc.
  • Ticker: OTEL
  • Exchange: NasdaqCM
  • Founded: 1998
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: US$39.385m
  • Shares outstanding: 3.42m
  • Website: https://www.otelco.com

Number of Employees


Location

  • Otelco Inc.
  • 505 Third Avenue East
  • Oneonta
  • Alabama
  • 35121
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OTELNasdaqCM (Nasdaq Capital Market)YesClass A Common StockUSUSDMay 2013

Biography

Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. It offers local services, including voice lines that provide local dial tone and calling features, such as calle...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/22 23:45
End of Day Share Price2020/11/20 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.