Telekom Austria (OTCMKTS:TKAGY) and Swisscom (OTCMKTS:SCMWY) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Institutional & Insider Ownership

0.1% of Swisscom shares are owned by institutional investors. 1.0% of Swisscom shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Telekom Austria and Swisscom’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telekom Austria $4.95 billion 1.11 $389.34 million $1.36 12.16
Swisscom $11.85 billion 2.01 $1.60 billion $3.08 14.94

Swisscom has higher revenue and earnings than Telekom Austria. Telekom Austria 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

Telekom Austria has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Swisscom has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Dividends

Telekom Austria pays an annual dividend of $0.45 per share and has a dividend yield of 2.7%. Swisscom pays an annual dividend of $1.47 per share and has a dividend yield of 3.2%. Telekom Austria pays out 33.1% of its earnings in the form of a dividend. Swisscom pays out 47.7% 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 Telekom Austria and Swisscom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telekom Austria 4.67% 10.04% 3.83%
Swisscom 12.92% 20.63% 6.98%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Telekom Austria and Swisscom, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telekom Austria 0 1 0 0 2.00
Swisscom 1 1 0 0 1.50

Summary

Swisscom beats Telekom Austria on 11 of the 14 factors compared between the two stocks.

About Telekom Austria

Telekom Austria Aktiengesellschaft, together with its subsidiaries, provides fixed-line and mobile communications services to individuals, commercial and non-commercial organizations, and other national and foreign carriers. Its fixed-line services include access, Internet, fixed-to-mobile calls, international traffic, voice value-added services, interconnection, call center services, data and ICT solutions, television services, and public payphone services; and mobile communications services comprise digital mobile communications services, including value-added services, text and multimedia messaging, m-commerce, and information services. The company also provides voice telephony, convergent products, Internet access, data and IT solutions, value added services, wholesale services, and IP television and payment solutions, as well as mobile telephone and satellite television services. In addition, it sells end-user terminal equipment; and sets up customer lines that include installation work. As of December 31, 2017, the company provided mobile communication services to approximately 20.7 million customers; and had approximately 6.0 million fixed-line revenue generating units. It has operations in Austria, Slovenia, Bulgaria, Belarus, Croatia, the Republic of Serbia, and the Republic of Macedonia. The company is headquartered in Vienna, Austria. Telekom Austria Aktiengesellschaft is a subsidiary of América Móvil, S.A.B. de C.V.

About Swisscom

Swisscom AG provides telecommunication services primarily in Switzerland and Italy. The company operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. It offers broadband, TV, fixed-network, and mobile phone subscription services, as well as national and international telephone, and data traffic services for residential customers, and small and medium-sized enterprises. The company also provides cloud, outsourcing, workplace, UCC, mobile phone, networking, business process optimization, SAP, Internet of Things, security and authentication, digital consulting, and software development solutions primarily for banking, hospital, and health insurance industries; fixed and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products. In addition, it plans, operates, and maintains network infrastructure and related information technology (IT) systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband services, such as voice, data, and TV services, as well as video-on-demand for residential and corporate customers. Further, the company provides mobile phone services; IT and network services, and customized solutions; and online and telephone directories, as well as sells merchandise products. Additionally, it offers collection services for radio and TV license fees; radio and cross platform services for customers in the media field; and securitized radio transmissions services, as well as constructs and maintains wired and wireless networks. Swisscom AG was founded in 1998 and is headquartered in Worblaufen, Switzerland.

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