KDDI (OTCMKTS:KDDIY) vs. KT (NYSE:KT) Financial Analysis

KT (NYSE:KT) and KDDI (OTCMKTS:KDDIY) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares KT and KDDI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KT	3.41%	5.20%	2.28%
KDDI	N/A	N/A	N/A

Risk & Volatility

KT has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, KDDI has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500.

Insider and Institutional Ownership

18.9% of KT shares are held by institutional investors. Comparatively, 0.1% of KDDI shares are held by institutional investors. 1.0% of KT shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for KT and KDDI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KT	1	1	2	0	2.25
KDDI	1	0	0	0	1.00

Valuation & Earnings

This table compares KT and KDDI”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KT	$19.37 billion	0.49	$321.90 million	$1.40	13.25
KDDI	$38.86 billion	1.84	$4.53 billion	$1.26	13.55

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

Dividends

KT pays an annual dividend of $0.66 per share and has a dividend yield of 3.6%. KDDI pays an annual dividend of $0.17 per share and has a dividend yield of 1.0%. KT pays out 47.1% of its earnings in the form of a dividend. KDDI pays out 13.5% 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.

Summary

KT beats KDDI on 10 of the 15 factors compared between the two stocks.

About KT

KT Corporation provides integrated telecommunications and platform services in Korea and internationally. The company offers mobile voice and data telecommunications services based on 5G, 4G LTE and 3G W-CDMA technology; fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services; broadband Internet access service and other Internet-related services; and data communication services, such as fixed-line and leased line services, as well as broadband Internet connection services. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and web comics and novels services; and credit card processing and other financial services. In addition, the company offers information technology and network services, and satellite services; sells handsets and miscellaneous telecommunications equipment; develops and sells residential units and commercial real estate; and rents real estate properties. Further, it maintains public telephones; offers security, B2C and B2B, investment fund, software development and data processing, value added network, call center, system integration and maintenance, marketing, PCS distribution, truck transportation and trucking arrangement business, cloud system implementation, satellite communication network, installation and management, and data center development and related services. Additionally, the company is involved in the Internet banking ASP and security solutions, residential building development and supply, sports team management, technology business finance, and submarine cable construction and maintenance businesses. The company was formerly known as Korea Telecom Corp. and changed its name to KT Corporation in March 2002. KT Corporation was founded in 1981 and is headquartered in Seongnam-si, South Korea.

About KDDI

KDDI Corporation provides telecommunications services in Japan and internationally. It operates in two segments, Personal Services and Business Services. The Personal Services segment offers telecommunication services and other services such as finance, energy, and LX through its multi-brands au, UQ mobile, and povo. The Business Services segment offers smartphones and other devices, network and cloud services, and data center services to corporate customers under the TELEHOUSE brand. The company was incorporated in 1984 and is headquartered in Tokyo, Japan.