Critical Analysis: China Mobile (Hong Kong) (CHL) and Telephone and Data Systems (TDS)
China Mobile (Hong Kong) (NYSE: CHL) and Telephone and Data Systems (NYSE:TDS) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.
Insider & Institutional Ownership
2.0% of China Mobile (Hong Kong) shares are owned by institutional investors. Comparatively, 82.5% of Telephone and Data Systems shares are owned by institutional investors. 17.3% of Telephone and Data Systems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of recent ratings and price targets for China Mobile (Hong Kong) and Telephone and Data Systems, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Mobile (Hong Kong)||1||3||2||0||2.17|
|Telephone and Data Systems||0||2||0||0||2.00|
Telephone and Data Systems has a consensus target price of $38.00, indicating a potential upside of 43.42%. Given Telephone and Data Systems’ higher probable upside, analysts clearly believe Telephone and Data Systems is more favorable than China Mobile (Hong Kong).
Earnings & Valuation
This table compares China Mobile (Hong Kong) and Telephone and Data Systems’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|China Mobile (Hong Kong)||$110.02 billion||1.93||$40.87 billion||N/A||N/A|
|Telephone and Data Systems||$5.04 billion||0.58||$934.00 million||$0.48||55.20|
China Mobile (Hong Kong) has higher revenue and earnings than Telephone and Data Systems.
This table compares China Mobile (Hong Kong) and Telephone and Data Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Mobile (Hong Kong)||N/A||N/A||N/A|
|Telephone and Data Systems||1.09%||1.15%||0.58%|
China Mobile (Hong Kong) pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Telephone and Data Systems pays an annual dividend of $0.62 per share and has a dividend yield of 2.3%. Telephone and Data Systems pays out 129.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. China Mobile (Hong Kong) has increased its dividend for 42 consecutive years.
Risk and Volatility
China Mobile (Hong Kong) has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500. Comparatively, Telephone and Data Systems has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.
Telephone and Data Systems beats China Mobile (Hong Kong) on 9 of the 16 factors compared between the two stocks.
About China Mobile (Hong Kong)
China Mobile Limited is an investment holding company principally engaged in telecommunication and related businesses. Its main businesses include Mobile businesses, Wireline Broadband businesses and Internet of Things (IoT) businesses. Mobile businesses include two categories of services. Voice services include local calls, domestic and international long distance calls, roaming services and voice value-added services. Data services include short message services and multimedia message services, wireless data traffic services and application and information services, such as Mobile Music, Mobile Reading and Mobile Video, among others. Wireline Broadband businesses include the provision of wireline broadband and related services. The Company also provides customer services, including phone bill enquiry, among others. The Company mainly operates businesses in Mainland China.
About Telephone and Data Systems
Telephone and Data Systems, Inc. is a diversified telecommunications company. The Company is engaged in conducting its Wireless operations through its subsidiary, United States Cellular Corporation (U.S. Cellular), as well as providing its wireline services, cable services, and hosted and managed services (HMS), through its subsidiary, TDS Telecommunications Corporation (TDS Telecom). It operates through four business segments: U.S. Cellular, Wireline, Cable, and Hosted and Managed Services. U.S. Cellular provides service to postpaid and prepaid customers. Wireline operations provide retail telecommunications services to both residential and commercial customers. Wireline offers services, including broadband, video, voice and network access services. Cable offers broadband, video and voice services under TDS and BendBroadband brand names. It provides a range of information technology (IT) services, including colocation, and cloud and hosting solutions through its HMS business.
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