Critical Contrast: Swisscom (OTCMKTS:SCMWY) versus Telia Company AB (publ) (OTCMKTS:TLSNY)

Swisscom (OTCMKTS:SCMWY) and Telia Company AB (publ) (OTCMKTS:TLSNY) are both large-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Earnings and Valuation

This table compares Swisscom and Telia Company AB (publ)’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Swisscom $11.84 billion 2.58 $1.63 billion $3.15 18.72
Telia Company AB (publ) $9.72 billion 0.00 -$2.50 billion ($1.21) N/A

Swisscom has higher revenue and earnings than Telia Company AB (publ). Telia Company AB (publ) is trading at a lower price-to-earnings ratio than Swisscom, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

0.1% of Swisscom shares are owned by institutional investors. Comparatively, 0.1% of Telia Company AB (publ) shares are owned by institutional investors. 1.0% of Swisscom shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Swisscom and Telia Company AB (publ)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Swisscom 15.94% 19.49% 7.37%
Telia Company AB (publ) -26.57% -32.73% -10.04%

Analyst Ratings

This is a summary of current ratings for Swisscom and Telia Company AB (publ), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Swisscom 4 3 0 0 1.43
Telia Company AB (publ) 4 1 2 0 1.71

Dividends

Swisscom pays an annual dividend of $2.07 per share and has a dividend yield of 3.5%. Telia Company AB (publ) pays an annual dividend of $0.34 per share. Swisscom pays out 65.7% of its earnings in the form of a dividend. Telia Company AB (publ) pays out -28.1% 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.

Risk and Volatility

Swisscom has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500. Comparatively, Telia Company AB (publ) has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500.

Summary

Swisscom beats Telia Company AB (publ) on 9 of the 14 factors compared between the two stocks.

About Swisscom

Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally. The company operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. It offers mobile and fixed-network services, such as telephony, broadband, TV, and mobile communications, as well as sells terminal equipment; and telecom and communications solutions for large corporations and small and medium-sized enterprises. The company also provides cloud, outsourcing, workplace, mobile phone, networking, business process optimization, SAP, and security and authentication solutions, as well as a range of services to the banking industry; Internet of Things solutions; digitization services to the healthcare sector; IT systems for health insurance companies; fixed-line and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products. In addition, it plans, operates, and maintains network infrastructure and IT systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband and mobile services, such as telephony and broadband services, as well as ICT solutions for residential, business, and wholesale customers. Further, the company provides IT and network services; online and telephone directories; and cross-platform retail media and security communication services, as well as builds and maintains wired and wireless networks. Swisscom AG was founded in 1852 and is headquartered in Bern, Switzerland.

About Telia Company AB (publ)

Telia Company AB (publ) provides communication services in Sweden, Finland, Norway, Denmark, Lithuania, and Estonia. The company offers mobile, broadband, television, and fixed telephony services to businesses, individuals, families, and communities. It is also involved in the broadcasting and content activities; and financing business. The company was formerly known as TeliaSonera AB (publ) and changed its name to Telia Company AB (publ) in April 2016. Telia Company AB (publ) was founded in 1853 and is headquartered in Solna, Sweden.

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