Swisscom (OTCMKTS: SCMWY) and Chunghwa Telecom (NYSE:CHT) are both large-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Risk & Volatility

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Swisscom has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, Chunghwa Telecom has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Valuation and Earnings

This table compares Swisscom and Chunghwa Telecom’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Swisscom $11.85 billion 2.15 $1.60 billion $3.09 15.89
Chunghwa Telecom $7.48 billion 3.94 $1.28 billion $1.65 23.01

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

Profitability

This table compares Swisscom and Chunghwa Telecom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Swisscom 13.47% 22.88% 7.26%
Chunghwa Telecom 17.08% 10.57% 8.68%

Dividends

Swisscom pays an annual dividend of $1.83 per share and has a dividend yield of 3.7%. Chunghwa Telecom pays an annual dividend of $1.29 per share and has a dividend yield of 3.4%. Swisscom pays out 59.2% of its earnings in the form of a dividend. Chunghwa Telecom pays out 78.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Swisscom is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

0.1% of Swisscom shares are held by institutional investors. Comparatively, 3.0% of Chunghwa Telecom shares are held by institutional investors. 1.0% of Swisscom shares are held by insiders. Comparatively, 1.0% of Chunghwa Telecom shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Swisscom and Chunghwa Telecom, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Swisscom 1 1 1 0 2.00
Chunghwa Telecom 0 0 0 0 N/A

Summary

Swisscom beats Chunghwa Telecom on 8 of the 13 factors compared between the two stocks.

Swisscom Company Profile

Swisscom AG is a holding company. The Company, through its subsidiaries, provides telecommunication services in Switzerland and Italy. The Company’s segments include Swisscom Switzerland, Fastweb, Other Operating Segments and Group Headquarters. Swisscom Switzerland comprises the customer segments, Residential Customers, Enterprise Customers and Wholesale, as well as the information technology (IT), Network and Infrastructure division. Fastweb is an alternative service provider in the Italian fixed-network market for both residential and business customers. The Other Operating Segments includes the Digital Business unit, as well as Participations and Subsidiaries in the areas of payment solutions, network construction and maintenance, radio transmitters, energy management and event solutions. Group Headquarters includes Group Business Steering, Group Strategy and Board Services, Group Communications and Responsibility, Group Security, Group Human Resources and Worklink AG.

Chunghwa Telecom Company Profile

Chunghwa Telecom Co., Ltd. provides telecommunication services. The Company’s segments include Domestic fixed communications business, which is engaged in the provision of local telephone services, domestic long distance telephone services, broadband access and related services; Mobile communications business, which is engaged in the provision of mobile services, sales of mobile handsets and data cards, and related services; Internet business, which is engaged in the provision of HiNet services and related services; International fixed communications business, which includes international long distance telephone services, international leased line services, international data services, satellite services, and information and communication technology (ICT) and other international services, and Others, which is engaged in the provision of non-telecom services. Its ICT service includes integrated services, such as intelligent energy network and intelligent transportation system.

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