China Telecom (NYSE: CHA) and BlackBerry (NYSE:BB) are both mid-cap wireless telecommunications services – nec companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Insider & Institutional Ownership

0.4% of China Telecom shares are held by institutional investors. Comparatively, 58.5% of BlackBerry shares are held by institutional investors. 22.7% of BlackBerry shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares China Telecom and BlackBerry’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Telecom N/A N/A N/A
BlackBerry 37.36% 3.70% 2.44%

Earnings and Valuation

This table compares China Telecom and BlackBerry’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Telecom $53.05 billion 0.73 $2.71 billion $3.61 13.33
BlackBerry $1.31 billion 5.59 -$1.21 billion $0.66 20.68

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

Analyst Recommendations

This is a summary of current ratings and price targets for China Telecom and BlackBerry, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Telecom 0 0 1 0 3.00
BlackBerry 3 7 5 0 2.13

BlackBerry has a consensus target price of $10.34, suggesting a potential downside of 24.22%. Given BlackBerry’s higher probable upside, analysts clearly believe BlackBerry is more favorable than China Telecom.

Dividends

China Telecom pays an annual dividend of $1.21 per share and has a dividend yield of 2.5%. BlackBerry does not pay a dividend. China Telecom pays out 33.5% of its earnings in the form of a dividend.

Risk and Volatility

China Telecom has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, BlackBerry has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500.

Summary

BlackBerry beats China Telecom on 11 of the 16 factors compared between the two stocks.

About China Telecom

China Telecom Corporation Limited is an investment holding company principally engaged in telecommunications and related businesses. The Company provides integrated information services, including wireline and mobile telecommunications services, Internet access services, information services and other value-added telecommunications services. The Company mainly operates its business in domestic market.

About BlackBerry

BlackBerry Limited (BlackBerry) provides mobile communications solutions. The Company is engaged in the sale of smartphones and enterprise software and services. The Company’s products and services include Enterprise Solutions and Services, Devices, BlackBerry Technology Solutions and Messaging. It is engaged in providing enterprise mobility management (EMM) and mobile security, and offers a portfolio of enterprise software solutions and services that can be deployed across a range of ecosystems and devices, including BlackBerry Enterprise Service (BES) 12 and Good Platforms, BES12 Cloud, enterprise file-sync-and-share (EFSS), SecuSUITE for Enterprise, Enhanced subscriber identity module (SIM)-Based Licensing (ESBL), WorkLife by BlackBerry solution and Professional Cybersecurity Services. The BlackBerry Technology Solutions business unit consists of five units: QNX, Certicom, Paratek, the BlackBerry IoT Platform and Intellectual Property and Patent Licensing (IPPL).

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