Analyzing SK Telecom Co. (SKM) & NTT DOCOMO (DCM)
SK Telecom Co. (NYSE: SKM) and NTT DOCOMO (NYSE:DCM) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.
This table compares SK Telecom Co. and NTT DOCOMO’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SK Telecom Co.||11.62%||12.85%||6.86%|
Risk and Volatility
SK Telecom Co. has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, NTT DOCOMO has a beta of 0.12, suggesting that its stock price is 88% less volatile than the S&P 500.
Insider and Institutional Ownership
11.9% of SK Telecom Co. shares are owned by institutional investors. Comparatively, 0.5% of NTT DOCOMO shares are owned by institutional investors. 1.0% of SK Telecom Co. shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares SK Telecom Co. and NTT DOCOMO’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|SK Telecom Co.||$15.06 billion||1.04||$4.00 billion||$2.80||8.66|
|NTT DOCOMO||$42.18 billion||2.05||$12.78 billion||$1.58||14.74|
NTT DOCOMO has higher revenue and earnings than SK Telecom Co.. SK Telecom Co. is trading at a lower price-to-earnings ratio than NTT DOCOMO, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for SK Telecom Co. and NTT DOCOMO, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SK Telecom Co.||0||3||1||0||2.25|
SK Telecom Co. pays an annual dividend of $0.72 per share and has a dividend yield of 3.0%. NTT DOCOMO pays an annual dividend of $0.68 per share and has a dividend yield of 2.9%. SK Telecom Co. pays out 25.7% of its earnings in the form of a dividend. NTT DOCOMO pays out 43.0% 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. SK Telecom Co. is clearly the better dividend stock, given its higher yield and lower payout ratio.
SK Telecom Co. beats NTT DOCOMO on 7 of the 13 factors compared between the two stocks.
SK Telecom Co. Company Profile
SK Telecom Co., Ltd. provides wireless telecommunications in Korea. The Company is engaged in the commercial development and implementation of wireless and fixed-line technologies and services, as well as develop its platforms, including Internet of things (IoT) solutions, lifestyle enhancement and advanced media. It operates through three segments: cellular services, which include wireless voice and data transmission services, sales of wireless devices, IoT solutions platform services and lifestyle enhancement platform services; fixed-line telecommunication services, which include fixed-line telephone services, broadband Internet services, advanced media platform services (including Internet Protocol television (IPTV)) and business communications services, and other businesses, which include its commerce business, its hardware business and other operations. Its brands include SK Telecom, T-Roaming, 7Mobile, B phone, 00700, B tv, Syrup, UO Smart Beam Laser, Astell&Kern and Nate.
NTT DOCOMO Company Profile
NTT DOCOMO, INC. (DOCOMO) is a mobile telecommunications carrier. The Company operates through three segments: telecommunications business, smart life business and other businesses. The telecommunications business segment includes mobile phone services (long-term evolution (LTE) (Xi) services and freedom of mobile multimedia access (FOMA) services), optical-fiber broadband service, satellite mobile communications services, international services and equipment sales related to these services. The smart life business segment includes video and music distribution, electronic books and other services offered through its dmarket portal, as well as finance/payment services, shopping services and various other services to support the Company’s customers’ daily lives. Its other businesses segment primarily includes Mobile Device Protection Service, as well as the development, sale and maintenance of information technology (IT) systems.
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