Analyzing BCE (NYSE:BCE) and China Telecom (NYSE:CHA)
BCE (NYSE:BCE) and China Telecom (NYSE:CHA) are both large-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.
This table compares BCE and China Telecom’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent recommendations and price targets for BCE and China Telecom, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
BCE presently has a consensus target price of $61.29, indicating a potential upside of 25.66%. China Telecom has a consensus target price of $53.90, indicating a potential upside of 36.46%. Given China Telecom’s higher possible upside, analysts clearly believe China Telecom is more favorable than BCE.
Valuation & Earnings
This table compares BCE and China Telecom’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|BCE||$18.11 billion||2.43||$2.26 billion||$2.71||18.00|
|China Telecom||$54.85 billion||0.58||$3.20 billion||$3.81||10.37|
China Telecom has higher revenue and earnings than BCE. China Telecom is trading at a lower price-to-earnings ratio than BCE, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
43.8% of BCE shares are owned by institutional investors. Comparatively, 0.5% of China Telecom shares are owned by institutional investors. 0.2% of BCE shares are owned by insiders. 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.
BCE pays an annual dividend of $2.39 per share and has a dividend yield of 4.9%. China Telecom pays an annual dividend of $1.44 per share and has a dividend yield of 3.6%. BCE pays out 88.2% 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 Telecom pays out 37.8% of its earnings in the form of a dividend.
Volatility and Risk
BCE has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500. Comparatively, China Telecom has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.
BCE beats China Telecom on 10 of the 16 factors compared between the two stocks.
BCE Company Profile
BCE Inc., a telecommunications and media company, provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. It operates in three segments: Bell Wireless, Bell Wireline, and Bell Media. The Bell Wireless segment offers wireless voice and data communications products and services, including 40 live and on-demand channels on smartphones and tablets; roaming services; push-to-talk, field service management, worker safety, and mobility management solutions; and asset management, smart buildings, smart cities, fleet management, and other Internet of Things services. It also provides various 4G LTE and LTE-A smartphones and tablets, mobile Internet hubs and sticks, and mobile Wi-Fi devices, as well as smartwatches, Bell connected cars, trackers, smart homes, lifestyle products, and virtual reality products. The Bell Wireline segment provides data, including Internet access and Internet protocol television; and local telephone, long distance, and other communications services and products. It also provides home security, monitoring, and automation services; and satellite TV and connectivity services. In addition, this segment offers local exchange carrier and telecommunications services; sells wireline-related products; and buys and sells local telephone, long distance, data, and other services from or to resellers, and other carriers. The Bell Media segment provides conventional TV, specialty TV, pay TV, and streaming services; and digital media, radio broadcasting, out-of-home advertising services, sports and other event production, and broadcasting services. It owns and operates approximately 30 conventional TV stations; 33 specialty and Pay TV channels; 3 direct-to-consumer streaming services; 109 licensed radio stations; and 200 Websites and approximately 30 apps. The company was formerly known as Bell Canada Enterprises Inc. BCE Inc. was founded in 1880 and is headquartered in Verdun, Canada.
China Telecom Company Profile
China Telecom Corporation Limited, together with its subsidiaries, provides wireline and mobile telecommunications services primarily in the People's Republic of China. It offers wireline voice services, including local wireline telephone services and long distance wireline services; CDMA mobile voice services, such as local calls, domestic and international long distance calls, intra-provincial roaming, and inter-provincial roaming and international roaming; wireline Internet access services comprising dial-up and broadband services; wireless Internet access services; and wireline, Internet, and mobile value-added services. The company also provides Best Tone information services; and information technology-based integrated solutions, such as system integration, outsourcing, special advisory, information application, knowledge, and software development services. In addition, it offers managed data services that include digital data network, frame relay, and asynchronous transfer mode services for government agencies, large corporations, and institutions; and leased line services, as well as sells, repairs, and maintains customer-end equipment. Further, the company provides international telecommunications services, including network equipment, international Internet access and transit, Internet data center, and mobile virtual network services in various countries, including the Asia Pacific, Europe, Africa, South America, and North America; and music production and related information, instant messenger, and e-commerce services, as well as sells telecommunications terminals. As of December 31, 2018, it had approximately 303 million mobile subscribers; 146 million wireline broadband subscribers; and 116 million access lines in service. The company was incorporated in 2002 and is based in Wanchai, Hong Kong. China Telecom Corporation Limited is a subsidiary of China Telecommunications Corporation.
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