TELIA Co A B/ADR (OTCMKTS:TLSNY) and TIM Participacoes (NYSE:TSU) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Insider and Institutional Ownership

0.1% of TELIA Co A B/ADR shares are held by institutional investors. Comparatively, 14.9% of TIM Participacoes shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

TELIA Co A B/ADR pays an annual dividend of $0.36 per share and has a dividend yield of 4.3%. TIM Participacoes pays an annual dividend of $0.41 per share and has a dividend yield of 2.6%. TELIA Co A B/ADR pays out 81.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TIM Participacoes pays out 51.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for TELIA Co A B/ADR and TIM Participacoes, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TELIA Co A B/ADR 2 0 0 0 1.00
TIM Participacoes 0 5 3 0 2.38

TIM Participacoes has a consensus price target of $18.25, suggesting a potential upside of 16.76%. Given TIM Participacoes’ stronger consensus rating and higher possible upside, analysts plainly believe TIM Participacoes is more favorable than TELIA Co A B/ADR.

Volatility and Risk

TELIA Co A B/ADR has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500. Comparatively, TIM Participacoes has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Profitability

This table compares TELIA Co A B/ADR and TIM Participacoes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TELIA Co A B/ADR 6.30% 10.41% 4.51%
TIM Participacoes 14.39% 12.93% 7.57%

Earnings & Valuation

This table compares TELIA Co A B/ADR and TIM Participacoes’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TELIA Co A B/ADR $9.36 billion 1.95 $1.13 billion $0.44 19.16
TIM Participacoes $3.21 billion 2.36 $386.64 million $0.80 19.54

TELIA Co A B/ADR has higher revenue and earnings than TIM Participacoes. TELIA Co A B/ADR is trading at a lower price-to-earnings ratio than TIM Participacoes, indicating that it is currently the more affordable of the two stocks.

Summary

TIM Participacoes beats TELIA Co A B/ADR on 12 of the 15 factors compared between the two stocks.

About TELIA Co A B/ADR

Telia Company AB (publ) provides network access, telecommunications, and other services primarily in Sweden, Finland, Norway, Denmark, Lithuania, Estonia, and Mexico. It offers mobile, broadband, TV, and fixed-line services to businesses, individuals, families, and communities. The company also develops and maintains fiber and cable networks; and provides international carrier, cloud, identity and access rights management, ICT, smart public transport, and customer financing services, as well as IT equipment and services. In addition, it engages in the wholesale of IP transit, Ethernet, IPX, and cloud connect products for Internet service providers, and content and cloud providers. The company markets its products and services under the Telia, Call me, DLG Tele, Diil, Activ, Telia Cloudy, LMT, Okarte, Amigo, Ezys, Chess, OneCall, MyCall, OneCall, Phonero, and Halebop brands, as well as Cygate, DataInfo, Telia Finance, and Skanova brands. It has 16.7 million mobile subscriptions, 2.2 million fixed voice subscriptions, 2.5 million broadband subscriptions, and 1.7 million TV subscriptions. The company was formerly known as TeliaSonera AB (publ) and changed its name to Telia Company AB (publ) in April 2016. Telia Company AB (publ) was founded in 1853 and is headquartered in Solna, Sweden.

About TIM Participacoes

TIM Participações S.A. provides telecommunication services in Brazil. The company offers mobile voice and data, broadband Internet access, value-added, and other telecommunications services and products. It provides prepaid and postpaid services; value-added services, including short message services or text messaging, and multimedia messaging services; and insurance services. The company also sells various mobile handsets and accessories through its dealer network, which includes its own stores, exclusive franchises, and authorized dealers; and offers co-billing services to other telecommunication service providers. As of December 31, 2017, it served a subscriber base of 58.6 million customers; and had approximately 12.2 thousand points of sales, including 156 company owned stores, as well as had approximately 310 thousand points of sales to access prepaid phone services through supermarkets, newsstands, and other small retailers. The company was formerly known as Tele Celular Sul Participações S.A. and changed its name to TIM Participações S.A. in August 2004. The company was founded in 1998 and is headquartered in Rio de Janeiro, Brazil. TIM Participações S.A. is a subsidiary of TIM Brasil Serviços e Participações S.A.

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