BT Group PLC (NYSE: BT) and Telecom Italia S.p.A. (NYSE:TI) are both large-cap telecommunications services companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares BT Group PLC and Telecom Italia S.p.A.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BT Group PLC 7.14% 39.24% 6.77%
Telecom Italia S.p.A. 9.70% 8.12% 2.79%

Analyst Ratings

This is a summary of recent recommendations for BT Group PLC and Telecom Italia S.p.A., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BT Group PLC 3 9 5 0 2.12
Telecom Italia S.p.A. 0 3 2 0 2.40

BT Group PLC presently has a consensus price target of $333.33, suggesting a potential upside of 1,930.04%. Telecom Italia S.p.A. has a consensus price target of $1.80, suggesting a potential downside of 77.27%. Given BT Group PLC’s higher probable upside, equities analysts plainly believe BT Group PLC is more favorable than Telecom Italia S.p.A..

Valuation & Earnings

This table compares BT Group PLC and Telecom Italia S.p.A.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
BT Group PLC $31.47 billion 1.03 $2.49 billion $1.04 15.79
Telecom Italia S.p.A. $21.06 billion 0.80 $2.00 billion $0.66 12.00

BT Group PLC has higher revenue and earnings than Telecom Italia S.p.A.. Telecom Italia S.p.A. is trading at a lower price-to-earnings ratio than BT Group PLC, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

BT Group PLC has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Telecom Italia S.p.A. has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Dividends

BT Group PLC pays an annual dividend of $0.95 per share and has a dividend yield of 5.8%. Telecom Italia S.p.A. does not pay a dividend. BT Group PLC pays out 91.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BT Group PLC has increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

0.9% of BT Group PLC shares are owned by institutional investors. Comparatively, 0.8% of Telecom Italia S.p.A. shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

BT Group PLC beats Telecom Italia S.p.A. on 11 of the 14 factors compared between the two stocks.

BT Group PLC Company Profile

BT Group plc is a communications services company. The Company is engaged in selling fixed-voice services, broadband, mobile and television products and services, as well as managed networked information technology (IT) solutions and cyber security protection. Its segments include Consumer, which provides fixed-voice, broadband, TV and mobile services; EE, which is a mobile network operator in the United Kingdom and provides mobile and fixed communications services to consumers; Business and Public Sector, which provides communications and IT services to businesses and the public sector in the United Kingdom and the Republic of Ireland (RoI) ;Global Services, which provides managed networked IT services to corporate customers; Wholesale and Ventures, which provides fixed and mobile services to communications providers (CPs); and Openreach, which provides copper and fiber connections between its exchanges and homes and businesses.

Telecom Italia S.p.A. Company Profile

Telecom Italia S.p.A. (Telecom Italia) operates fixed voice and data infrastructure in Italy, and provides mobile network platforms. The Company focuses on various areas of digital services, including Enriched Communication, Trusted Digital Life, Business Life, Indoor Life, Mobile Open Life and Digital Entertainment. Its segments include Consumer, Business, National Wholesale and Other. It is engaged in developing various projects in areas, including Smart Green, Social Reading, Solutions for good schooling, Digital tourism 2.0, Smart Home, FriendTV and Big Data. Smart Green is the assessment of projects connected with the environment and potential partnerships with the local government offices for the monitoring of air in public offices and urban areas, using networks of sensors connected to the Company’s Cloud. The Company is involved, either alone or in partnership with external partners, in devising and developing healthcare services at national, regional and local level.

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