Financial Survey: AT&T (NYSE:T) vs. NTT (OTCMKTS:NTTYY)

NTT (OTCMKTS:NTTYY) and AT&T (NYSE:T) are both large-cap communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Analyst Ratings

This is a breakdown of recent recommendations for NTT and AT&T, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NTT	0	1	0	1	3.00
AT&T	1	9	12	0	2.50

AT&T has a consensus price target of $27.56, suggesting a potential upside of 23.95%. Given AT&T’s higher probable upside, analysts clearly believe AT&T is more favorable than NTT.

Insider & Institutional Ownership

0.1% of NTT shares are held by institutional investors. Comparatively, 57.1% of AT&T shares are held by institutional investors. 0.1% of AT&T shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

NTT pays an annual dividend of $0.64 per share and has a dividend yield of 2.5%. AT&T pays an annual dividend of $1.11 per share and has a dividend yield of 5.0%. NTT pays out 34.8% of its earnings in the form of a dividend. AT&T pays out 60.0% 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.

Profitability

This table compares NTT and AT&T’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NTT	6.29%	9.10%	1.97%
AT&T	10.19%	13.41%	3.92%

Valuation and Earnings

This table compares NTT and AT&T”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NTT	$95.72 billion	0.86	$6.84 billion	$1.84	13.75
AT&T	$128.85 billion	1.16	$21.95 billion	$1.85	12.02

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

Risk and Volatility

NTT has a beta of 0.07, suggesting that its share price is 93% less volatile than the S&P 500. Comparatively, AT&T has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500.

Summary

AT&T beats NTT on 13 of the 17 factors compared between the two stocks.

About NTT

NTT, formally Nippon Telegraph and Telephone Corporation, is a Japanese telecommunications and information technology company. Its businesses include fixed-line and mobile communications, internet and network services, systems integration, cloud computing, data centers, and other information and communications technology solutions. The company traces its origins to Japan’s Nippon Telegraph and Telephone Public Corporation, established in 1952. It was reorganized as a private corporation in 1985 and has since developed a broad portfolio of communications and technology businesses.

About AT&T

AT&T Inc. (NYSE: T) is a telecommunications company that provides wireless communications, broadband, and related connectivity services. Its offerings include mobile voice and data plans, internet access, fiber broadband, fixed wireless services, and business communications solutions. The company serves consumers, businesses, government agencies, and other organizations primarily in the United States. AT&T’s business operations include wireless network services, wireline connectivity, fiber-optic internet, voice services, and networking solutions designed to connect locations, devices, and applications.