Rogers Communications (NYSE: RCI) and TIM Participacoes (NYSE:TSU) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Earnings & Valuation

This table compares Rogers Communications and TIM Participacoes’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rogers Communications $10.35 billion 2.57 $630.59 million $1.89 27.29
TIM Participacoes $4.50 billion 1.99 $215.14 million $0.63 29.41

Rogers Communications has higher revenue and earnings than TIM Participacoes. Rogers Communications is trading at a lower price-to-earnings ratio than TIM Participacoes, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Rogers Communications and TIM Participacoes, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rogers Communications 0 4 2 0 2.33
TIM Participacoes 0 1 5 0 2.83

Rogers Communications presently has a consensus price target of $62.50, suggesting a potential upside of 21.19%. TIM Participacoes has a consensus price target of $19.50, suggesting a potential upside of 5.23%. Given Rogers Communications’ higher possible upside, equities research analysts plainly believe Rogers Communications is more favorable than TIM Participacoes.

Risk and Volatility

Rogers Communications has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, TIM Participacoes has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Profitability

This table compares Rogers Communications and TIM Participacoes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rogers Communications 9.20% 30.40% 6.09%
TIM Participacoes 5.57% 5.71% 3.02%

Institutional and Insider Ownership

47.2% of Rogers Communications shares are held by institutional investors. Comparatively, 15.5% of TIM Participacoes shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Rogers Communications pays an annual dividend of $1.54 per share and has a dividend yield of 3.0%. TIM Participacoes pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. Rogers Communications pays out 81.5% 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 25.4% of its earnings in the form of a dividend. TIM Participacoes has increased its dividend for 4 consecutive years.

Summary

Rogers Communications beats TIM Participacoes on 10 of the 16 factors compared between the two stocks.

About Rogers Communications

Rogers Communications Inc. is a communications and media company. The Company provides wireless communications services, and cable television, Internet, information technology (IT) and telephony services to consumers and businesses. Its segments include Wireless, Cable, Business Solutions and Media. The Wireless segment is engaged in wireless telecommunications operations for Canadian consumers and businesses. The Cable segment include cable telecommunications operations, including Internet, television and telephony (phone) services for Canadian consumers and businesses. The Business Solutions segment is engaged in network connectivity through its fiber network and data center assets to support a range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector and carrier wholesale markets. The Media segment has a portfolio of media properties, including sports media and entertainment, multi-platform shopping, digital media and publishing.

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.

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