Head-To-Head Survey: Swisscom (OTCMKTS:SCMWY) & Telephone and Data Systems (NYSE:TDS)

Telephone and Data Systems (NYSE:TDS) and Swisscom (OTCMKTS:SCMWY) are both communication services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Valuation and Earnings

This table compares Telephone and Data Systems and Swisscom”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telephone and Data Systems	$1.23 billion	2.88	-$6.24 million	$4.09	7.52
Swisscom	$18.16 billion	24.54	$1.53 billion	$3.13	27.48

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

Volatility and Risk

Telephone and Data Systems has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500. Comparatively, Swisscom has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Telephone and Data Systems and Swisscom, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telephone and Data Systems	0	3	2	0	2.40
Swisscom	3	4	0	0	1.57

Telephone and Data Systems presently has a consensus target price of $47.50, suggesting a potential upside of 54.40%. Given Telephone and Data Systems’ stronger consensus rating and higher probable upside, research analysts plainly believe Telephone and Data Systems is more favorable than Swisscom.

Profitability

This table compares Telephone and Data Systems and Swisscom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telephone and Data Systems	43.41%	12.48%	6.36%
Swisscom	8.73%	11.18%	3.65%

Dividends

Telephone and Data Systems pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Swisscom pays an annual dividend of $2.03 per share and has a dividend yield of 2.4%. Telephone and Data Systems pays out 3.9% of its earnings in the form of a dividend. Swisscom pays out 64.9% 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.

Insider & Institutional Ownership

80.0% of Telephone and Data Systems shares are owned by institutional investors. 14.2% of Telephone and Data Systems shares are owned by company insiders. Comparatively, 1.0% of Swisscom shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Telephone and Data Systems beats Swisscom on 11 of the 16 factors compared between the two stocks.

About Telephone and Data Systems

Telephone and Data Systems, Inc. (TDS) is a U.S. telecommunications company founded in 1969. Its TDS Telecom business provides broadband, video and voice services to residential and business customers, using fiber and other wired networks as well as fixed wireless in some areas. TDS Telecom serves communities across multiple U.S. states, including smaller and rural markets. Its offerings include high-speed internet access, television service and business communications solutions. TDS has also operated wireless telecommunications businesses during its history.

About Swisscom

Swisscom AG is a telecommunications and information technology company headquartered in Switzerland. It provides mobile and fixed-line phone services, broadband internet, television and related digital services to residential and business customers. Its business offerings also include IT, cloud and cybersecurity solutions. Swisscom serves customers in Switzerland and Italy. In Italy, it operates through Fastweb; following the integration of Vodafone Italia, the business operates under the Fastweb + Vodafone name.