TIM Participacoes (NYSE: TSU) and China Mobile (NYSE:CHL) are both large-cap telecommunications services companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.
This table compares TIM Participacoes and China Mobile’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
TIM Participacoes pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. China Mobile pays an annual dividend of $1.65 per share and has a dividend yield of 3.6%. TIM Participacoes pays out 20.5% of its earnings in the form of a dividend. China Mobile pays out 38.6% 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.
Institutional and Insider Ownership
15.0% of TIM Participacoes shares are held by institutional investors. Comparatively, 1.9% of China Mobile shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current ratings for TIM Participacoes and China Mobile, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
TIM Participacoes currently has a consensus target price of $21.20, indicating a potential downside of 5.53%. Given TIM Participacoes’ stronger consensus rating and higher probable upside, analysts plainly believe TIM Participacoes is more favorable than China Mobile.
Volatility & Risk
TIM Participacoes has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, China Mobile has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.
Earnings and Valuation
This table compares TIM Participacoes and China Mobile’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TIM Participacoes||$3.21 billion||3.39||$386.64 million||$0.78||28.77|
|China Mobile||$106.68 billion||1.77||$16.37 billion||$4.28||10.77|
China Mobile has higher revenue and earnings than TIM Participacoes. China Mobile is trading at a lower price-to-earnings ratio than TIM Participacoes, indicating that it is currently the more affordable of the two stocks.
TIM Participacoes beats China Mobile on 11 of the 15 factors compared between the two stocks.
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.
About China Mobile
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.
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