Financial Contrast: Iridium Communications (NASDAQ:IRDM) and KT (NYSE:KT)

Iridium Communications (NASDAQ:IRDM) and KT (NYSE:KT) are both mid-cap communication services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.

Risk and Volatility

Iridium Communications has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, KT has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Dividends

Iridium Communications pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. KT pays an annual dividend of $1.04 per share and has a dividend yield of 5.7%. Iridium Communications pays out 68.2% of its earnings in the form of a dividend. KT pays out 55.9% 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. Iridium Communications has increased its dividend for 1 consecutive years. KT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Iridium Communications and KT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iridium Communications	10.55%	22.57%	4.11%
KT	4.72%	6.45%	2.93%

Valuation & Earnings

This table compares Iridium Communications and KT”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iridium Communications	$871.66 million	5.77	$114.37 million	$0.88	53.94
KT	$19.88 billion	0.44	$1.20 billion	$1.86	9.83

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Iridium Communications and KT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iridium Communications	1	4	3	0	2.25
KT	0	2	1	0	2.33

Iridium Communications currently has a consensus price target of $41.20, suggesting a potential downside of 13.21%. KT has a consensus price target of $23.08, suggesting a potential upside of 26.28%. Given KT’s stronger consensus rating and higher probable upside, analysts plainly believe KT is more favorable than Iridium Communications.

Insider and Institutional Ownership

84.4% of Iridium Communications shares are held by institutional investors. Comparatively, 18.9% of KT shares are held by institutional investors. 2.7% of Iridium Communications shares are held by company insiders. Comparatively, 1.0% of KT shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Iridium Communications beats KT on 10 of the 17 factors compared between the two stocks.

About Iridium Communications

Iridium Communications Inc. provides mobile voice and data communications services and products to businesses, the United States and international governments, non-governmental organizations, and consumers worldwide. The company offers postpaid mobile voice and data satellite communications; prepaid mobile voice satellite communications; push-to-talk; broadband data; and Internet of Things (IoT) services. It also provides hosted payload and other data services, such as satellite time and location services; and inbound connections from the public switched telephone network, short message, subscriber identity module, activation, customer reactivation, and other peripheral services. In addition, the company offers voice and data solutions comprising personnel tracking devices; asset tracking devices for equipment, vehicles, and aircrafts; beyond-line-of-sight aircraft communications applications; maritime communications applications; specialized communications solutions for high-value individuals; mobile communications and data devices for the military and other government agencies, such as secure satellite handsets, as well as netted voice, messaging, and paging services; and maintenance services for the United States government's dedicated gateway. Further, it provides satellite handsets, voice and data modems, broadband data devices, and IoT data devices; various accessories for its devices that include batteries, holsters, earbud headphones, portable auxiliary antennas, antenna adaptors, USB data cables, charging units, and others; and engineering and support services. Iridium Communications Inc. sells its products and services to commercial end users through a wholesale distribution network that include service providers, and value-added resellers and manufacturers. The company was formerly known as Iridium Holdings LLC and changed its name to Iridium Communications Inc. in September 2009. Iridium Communications Inc. is headquartered in McLean, Virginia.

About KT

KT Corporation provides integrated telecommunications and platform services in Korea and internationally. The company offers mobile voice and data telecommunications services based on 5G, 4G LTE and 3G W-CDMA technology; fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services; broadband Internet access service and other Internet-related services; and data communication services, such as fixed-line and leased line services, as well as broadband Internet connection services. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and web comics and novels services; and credit card processing and other financial services. In addition, the company offers information technology and network services, and satellite services; sells handsets and miscellaneous telecommunications equipment; develops and sells residential units and commercial real estate; and rents real estate properties. Further, it maintains public telephones; offers security, B2C and B2B, investment fund, software development and data processing, value added network, call center, system integration and maintenance, marketing, PCS distribution, truck transportation and trucking arrangement business, cloud system implementation, satellite communication network, installation and management, and data center development and related services. Additionally, the company is involved in the Internet banking ASP and security solutions, residential building development and supply, sports team management, technology business finance, and submarine cable construction and maintenance businesses. The company was formerly known as Korea Telecom Corp. and changed its name to KT Corporation in March 2002. KT Corporation was founded in 1981 and is headquartered in Seongnam-si, South Korea.