TIM (NYSE:TIMB) and T-Mobile US (NASDAQ:TMUS) Critical Comparison

T-Mobile US (NASDAQ:TMUS) and TIM (NYSE:TIMB) are both communication services companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Profitability

This table compares T-Mobile US and TIM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
T-Mobile US	11.45%	20.16%	5.41%
TIM	15.73%	17.99%	7.74%

Volatility & Risk

T-Mobile US has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, TIM has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Dividends

T-Mobile US pays an annual dividend of $4.08 per share and has a dividend yield of 2.2%. TIM pays an annual dividend of $1.04 per share and has a dividend yield of 5.8%. T-Mobile US pays out 42.7% of its earnings in the form of a dividend. TIM pays out 61.5% 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for T-Mobile US and TIM, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
T-Mobile US	0	8	21	1	2.77
TIM	1	9	2	1	2.23

T-Mobile US currently has a consensus target price of $252.08, indicating a potential upside of 37.72%. TIM has a consensus target price of $24.82, indicating a potential upside of 39.03%. Given TIM’s higher possible upside, analysts plainly believe TIM is more favorable than T-Mobile US.

Valuation and Earnings

This table compares T-Mobile US and TIM”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
T-Mobile US	$88.31 billion	2.22	$10.99 billion	$9.55	19.17
TIM	$4.77 billion	1.81	$772.28 million	$1.69	10.56

T-Mobile US has higher revenue and earnings than TIM. TIM is trading at a lower price-to-earnings ratio than T-Mobile US, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

42.5% of T-Mobile US shares are owned by institutional investors. 0.3% of T-Mobile US shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

T-Mobile US beats TIM on 11 of the 16 factors compared between the two stocks.

About T-Mobile US

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to customers in the postpaid, prepaid, and wholesale and other services. It also provides wireless devices, including smartphones, wearables, tablets, home broadband routers, and other mobile communication devices, as well as wireless devices and accessories; financing through equipment installment plans; reinsurance for device insurance policies and extended warranty contracts; leasing through JUMP! On Demand; and High Speed Internet services. In addition, the company offers services, devices, and accessories under the T-Mobile and Metro by T-Mobile brands through its owned and operated retail stores, T-Mobile app and customer care channels, and its websites. It also sells its devices to dealers and other third-party distributors for resale through independent third-party retail outlets and various third-party websites. The company was founded in 1994 and is headquartered in Bellevue, Washington.

About TIM

TIM S.A., a telecommunications company, provides mobile voice, data, and broadband services in Brazil. The company offers in mobile, landline, long-distance, and data transmission services. It also offers fixed ultra-broadband, fixed ultraband broadband, and digital content services. The company serves individuals and corporates, as well as small, medium, and large companies. TIM S.A is based in Rio de Janeiro, Brazil. The company operates as a subsidiary of TIM Brasil Serviços e Participações S.A.