AT&T (NYSE: T) and China Unicom (Hong Kong) (NYSE:CHU) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Analyst Recommendations

This is a summary of current ratings and price targets for AT&T and China Unicom (Hong Kong), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AT&T 0 17 10 0 2.37
China Unicom (Hong Kong) 2 1 5 0 2.38

AT&T presently has a consensus target price of $43.75, indicating a potential upside of 17.07%. China Unicom (Hong Kong) has a consensus target price of $12.50, indicating a potential downside of 17.71%. Given AT&T’s higher probable upside, analysts plainly believe AT&T is more favorable than China Unicom (Hong Kong).

Valuation & Earnings

This table compares AT&T and China Unicom (Hong Kong)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AT&T $161.93 billion 1.42 $49.37 billion $2.12 17.63
China Unicom (Hong Kong) $40.52 billion 0.90 $11.69 billion N/A N/A

AT&T has higher revenue and earnings than China Unicom (Hong Kong).

Institutional and Insider Ownership

55.2% of AT&T shares are held by institutional investors. Comparatively, 1.2% of China Unicom (Hong Kong) shares are held by institutional investors. 0.1% of AT&T shares are held by insiders. Comparatively, 77.5% of China Unicom (Hong Kong) shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

AT&T pays an annual dividend of $1.96 per share and has a dividend yield of 5.2%. China Unicom (Hong Kong) does not pay a dividend. AT&T pays out 92.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. China Unicom (Hong Kong) has raised its dividend for 32 consecutive years.

Profitability

This table compares AT&T and China Unicom (Hong Kong)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AT&T 8.12% 14.53% 4.43%
China Unicom (Hong Kong) N/A N/A N/A

Risk and Volatility

AT&T has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, China Unicom (Hong Kong) has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Summary

AT&T beats China Unicom (Hong Kong) on 10 of the 15 factors compared between the two stocks.

AT&T Company Profile

AT&T Inc. is a holding company. The Company is a provider of communications and digital entertainment services in the United States and the world. The Company operates through four segments: Business Solutions, Entertainment Group, Consumer Mobility and International. The Company offers its services and products to consumers in the United States, Mexico and Latin America and to businesses and other providers of telecommunications services worldwide. It also owns and operates three regional TV sports networks, and retains non-controlling interests in another regional sports network and a network dedicated to game-related programming, as well as Internet interactive game playing. Its services and products include wireless communications, data/broadband and Internet services, digital video services, local and long-distance telephone services, telecommunications equipment, managed networking, and wholesale services. Its subsidiaries include AT&T Mobility and SKY Brasil Servicos Ltda.

China Unicom (Hong Kong) Company Profile

China Unicom (Hong Kong) Limited is a Hong Kong-based investment holding company principally engaged in the provision of telecommunications services. The Company’s businesses include mobile businesses, fixed-line businesses and others. Its mobile businesses include the provision of call services, roaming services, mobile broadband services, traditional value-added services such as short message services, multimedia message services and wireless Internet access card, as well as new value-added services such as mobile music, mobile television and Wo portal services. Its fixed-line businesses include broadband and Internet networks businesses, among others. The Company’s subsidiaries include CUCL, China Unicom Global Limited and China Unicom (Europe) Operations Limited.

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