TIM Participacoes (NYSE: TSU) and Vodafone Group PLC (NASDAQ:VOD) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitabiliy, valuation, dividends and institutional ownership.

Earnings and Valuation

This table compares TIM Participacoes and Vodafone Group PLC’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TIM Participacoes $4.75 billion 1.63 $1.19 billion $0.47 34.06
Vodafone Group PLC N/A N/A N/A N/A N/A

TIM Participacoes has higher revenue and earnings than Vodafone Group PLC.

Institutional & Insider Ownership

19.3% of TIM Participacoes shares are owned by institutional investors. Comparatively, 10.5% of Vodafone Group PLC shares are owned by institutional investors. 1.0% of Vodafone Group PLC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for TIM Participacoes and Vodafone Group PLC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TIM Participacoes 1 1 5 0 2.57
Vodafone Group PLC 1 5 7 1 2.57

TIM Participacoes currently has a consensus price target of $16.80, suggesting a potential upside of 4.93%. Vodafone Group PLC has a consensus price target of $31.00, suggesting a potential upside of 6.38%. Given Vodafone Group PLC’s higher probable upside, analysts clearly believe Vodafone Group PLC is more favorable than TIM Participacoes.

Risk & Volatility

TIM Participacoes has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, Vodafone Group PLC has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Dividends

TIM Participacoes pays an annual dividend of $0.07 per share and has a dividend yield of 0.4%. Vodafone Group PLC pays an annual dividend of $1.59 per share and has a dividend yield of 5.5%. TIM Participacoes pays out 14.9% of its earnings in the form of a dividend. Vodafone Group PLC has raised its dividend for 4 consecutive years. Vodafone Group PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares TIM Participacoes and Vodafone Group PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TIM Participacoes 4.32% 4.47% 2.29%
Vodafone Group PLC N/A N/A N/A

Summary

Vodafone Group PLC beats TIM Participacoes on 7 of the 13 factors compared between the two stocks.

About TIM Participacoes

TIM Participacoes S.A. (TIM) is a provider of mobile telecommunication services in Brazil. The Company, through its subsidiaries in various telecommunications markets, operates mobile, fixed and long distance telephony, data transmission and ultra-broadband services. Its direct subsidiaries include TIM Celular S.A., which provides landline telephone services (commuted fixed telephonic service (STFC))-domestic long distance and international long distance voice services, personal mobile service (SMP) and multimedia communication service (multimedia service of communication (SCM)) in all Brazilian states and in the Federal District, and Intelig Telecomunicacoes Ltda., which provides STFC-local voices services and SCM services in all Brazilian states and in the Federal District. Its consumer plans include prepaid plans, post-paid plans and controle plans. It offers value-added services, including short message services or text messaging, multimedia messaging services and push-mail.

About Vodafone Group PLC

Vodafone Group Plc (Vodafone) is a telecommunications company. The Company’s business is organized into two geographic regions: Europe, and Africa, Middle East and Asia Pacific (AMAP). Its segments include Europe and AMAP. Its Europe segment includes geographic regions, such as Germany, Italy, the United Kingdom, Spain and Other Europe. The Other Europe includes the Netherlands, Portugal, Greece, Hungary and Romania, among others. Its AMAP segment includes India, South Africa, Tanzania, Mozambique, Lesotho, Africa, Turkey, Australia, Egypt, Ghana, Kenya, New Zealand and Qatar, among others. The Company provides a range of services, including voice, messaging and data across mobile and fixed networks. The Company acquires spectrum and licenses to use radio frequencies that deliver mobile services. Its fixed capabilities include cable, fiber and copper networks to enable television, broadband and voice services.

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