SoftBank Group (OTCMKTS:SFTBF) & Verizon Communications (NYSE:VZ) Financial Comparison

Verizon Communications (NYSE:VZ) and SoftBank Group (OTCMKTS:SFTBF) are both communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Verizon Communications and SoftBank Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verizon Communications	0	12	9	0	2.43
SoftBank Group	0	0	0	0	0.00

Verizon Communications presently has a consensus target price of $50.84, indicating a potential upside of 8.17%. Given Verizon Communications’ stronger consensus rating and higher possible upside, analysts plainly believe Verizon Communications is more favorable than SoftBank Group.

Earnings and Valuation

This table compares Verizon Communications and SoftBank Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verizon Communications	$138.19 billion	1.41	$17.17 billion	$3.84	12.24
SoftBank Group	N/A	N/A	N/A	$569.15	0.06

Verizon Communications has higher revenue and earnings than SoftBank Group. SoftBank Group is trading at a lower price-to-earnings ratio than Verizon Communications, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

62.1% of Verizon Communications shares are held by institutional investors. Comparatively, 25.0% of SoftBank Group shares are held by institutional investors. 0.0% of Verizon Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Verizon Communications pays an annual dividend of $2.83 per share and has a dividend yield of 6.0%. SoftBank Group pays an annual dividend of $31.85 per share and has a dividend yield of 89.9%. Verizon Communications pays out 73.7% of its earnings in the form of a dividend. SoftBank Group pays out 5.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Verizon Communications has increased its dividend for 20 consecutive years. SoftBank Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Verizon Communications and SoftBank Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verizon Communications	11.64%	19.48%	5.07%
SoftBank Group	N/A	N/A	N/A

Summary

Verizon Communications beats SoftBank Group on 11 of the 14 factors compared between the two stocks.

About Verizon Communications

Verizon Communications Inc., through its subsidiaries, engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It operates in two segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business). The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements; and fixed wireless access (FWA) broadband through its wireless networks, as well as related equipment and devices, such as smartphones, tablets, smart watches, and other wireless-enabled connected devices. The segment also offers wireline services in the Mid-Atlantic and Northeastern United States, as well as Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network. The Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and conferencing, corporate networking, security and managed network, local and long-distance voice, and network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was incorporated in 1983 and is headquartered in New York, New York.

About SoftBank Group

SoftBank Group Corp. provides telecommunication services in Japan and internationally. It operates through Investment Business of Holding Companies, SoftBank Vision Funds, SoftBank, Arm, and Other segments. The company offers mobile communications and solutions to enterprise customers, and broadband services to retail customers; and sells mobile devices and software tools, as well as related services. It also provides internet advertising and e-commerce services; payment and financial services; information and communication technology services products to enterprise customers; and communication device-related products and Internet of Things equipment to retail customers. In addition, the company engages in design of microprocessor intellectual property and related technology; alternative investment management; ownership of professional baseball team; operation of baseball games; management and maintenance of baseball stadium and other sports facilities; distribution of video, voice, and data content via media businesses. Further, it engages in the certification services, security solutions, and Linux/OSS businesses; operation of comprehensive IT information site ITmedia; sale of indirect materials such as consumable supplies; facility management; planning and operation of fashion e-commerce website; operational support of brands' own e-commerce website; operation of fashion coordination app; management of few funds; generation of electricity from renewable energy sources; and supply and sale of electricity. The company was formerly known as SoftBank Corp. and changed its name to SoftBank Group Corp. in July 2015. SoftBank Group Corp. was incorporated in 1981 and is headquartered in Tokyo, Japan.