U.S. telecommunications giants CenturyLink (CTL) and Verizon (VZ)have made acquisitions and expenditures to broaden their service offerings to different sectors. Both have made acquisitions and expenditures in managed services and cloud computing. Both have made expenditures in broadband services and offering entertainment and streaming services to customers.

CenturyLink has consumer offerings of broadband, cable and high speed Internet in the U.S. and in managed services in foreign markets. Verizon has the same consumer offerings domestically as well as wireless on a global basis. Verizon offers managed services and cloud computing worldwide. The success of both these companies depends on the growth of their services, organically or through the performance of their acquisitions. Each company has made considerable capital expenditures to provide all of these services. The performance of these acquisitions will be the foundation for the future revenue and income growth for each of these companies. Let’s look at which company is likely to have the better performance based on its acquisitions and its capital expenditures.

CenturyLink’s common shares trade around $38.50, in between a 52-week range of $31.16 and $43.49. It has a price earnings multiple of 36.5, earnings per share of $1.07, and a dividend yield of 7.40%. CenturyLink has total cash of $128 million and total debt of $21.84 billion. Its book value per share is $33.67.

CenturyLink purchased Savvis in April of 2011 for $2.5 billion to enter the cloud computing market. CenturyLink’s acquisition of Savvis contributed to the increase in operating revenue for the fourth quarter of 2011 to $4.65 billion from $1.72 billion in 2010.To continue reading, click here.