SK Telecom (NYSE: SKM) and ORBCOMM (NASDAQ:ORBC) are both telecommunications services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Dividends

SK Telecom pays an annual dividend of $0.72 per share and has a dividend yield of 2.6%. ORBCOMM does not pay a dividend. SK Telecom pays out 20.2% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings for SK Telecom and ORBCOMM, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SK Telecom 0 1 2 0 2.67
ORBCOMM 0 0 5 0 3.00

ORBCOMM has a consensus target price of $13.30, indicating a potential upside of 31.68%. Given ORBCOMM’s stronger consensus rating and higher possible upside, analysts clearly believe ORBCOMM is more favorable than SK Telecom.

Volatility and Risk

SK Telecom has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, ORBCOMM has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Earnings and Valuation

This table compares SK Telecom and ORBCOMM’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SK Telecom $15.38 billion 1.13 $1.51 billion $3.57 7.68
ORBCOMM $186.74 million 4.02 -$23.51 million ($0.78) -12.95

SK Telecom has higher revenue and earnings than ORBCOMM. ORBCOMM is trading at a lower price-to-earnings ratio than SK Telecom, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares SK Telecom and ORBCOMM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SK Telecom 11.62% 12.56% 6.73%
ORBCOMM -25.32% -8.01% -3.94%

Insider & Institutional Ownership

11.4% of SK Telecom shares are held by institutional investors. Comparatively, 77.8% of ORBCOMM shares are held by institutional investors. 1.0% of SK Telecom shares are held by company insiders. Comparatively, 9.5% of ORBCOMM shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

ORBCOMM beats SK Telecom on 8 of the 15 factors compared between the two stocks.

About SK Telecom

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.

About ORBCOMM

ORBCOMM Inc. is a provider of Internet of Things (IoT) solutions, including network connectivity, devices, device management and Web reporting applications. The Company’s IoT products and services are designed to track, monitor and manage security for a range of assets, such as trailers, trucks, rail cars, sea containers, generators, fluid tanks, marine vessels, diesel or electric powered generators (gensets), oil and gas wells, pipeline monitoring equipment, irrigation control systems, and utility meters, in industries for transportation and supply chain, heavy equipment, fixed asset monitoring, maritime and government. It also provides Automatic Identification System (AIS) data services to assist in vessel navigation and to manage maritime safety for government and commercial customers across the world. It provides its services using various network platforms, including its own constellation of low-Earth orbit (LEO) satellites.

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