Critical Analysis: TELUS (NYSE:TU) vs. Telecom Italia (OTCMKTS:TIIAY)

Telecom Italia (OTCMKTS:TIIAY) and TELUS (NYSE:TU) are both large-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Profitability

This table compares Telecom Italia and TELUS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telecom Italia	N/A	N/A	N/A
TELUS	5.42%	8.42%	2.38%

Valuation & Earnings

This table compares Telecom Italia and TELUS”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telecom Italia	$15.88 billion	0.98	-$660.08 million	N/A	N/A
TELUS	$20.35 billion	0.98	$796.57 million	$0.52	24.74

TELUS has higher revenue and earnings than Telecom Italia.

Institutional and Insider Ownership

49.4% of TELUS shares are held by institutional investors. 0.1% of TELUS shares are held by company 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Telecom Italia and TELUS, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telecom Italia	0	3	1	2	2.83
TELUS	1	4	5	0	2.40

TELUS has a consensus price target of $17.63, suggesting a potential upside of 37.00%. Given TELUS’s higher possible upside, analysts plainly believe TELUS is more favorable than Telecom Italia.

Risk & Volatility

Telecom Italia has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, TELUS has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Dividends

Telecom Italia pays an annual dividend of $0.08 per share and has a dividend yield of 1.1%. TELUS pays an annual dividend of $1.22 per share and has a dividend yield of 9.5%. TELUS pays out 234.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TELUS has raised its dividend for 5 consecutive years. TELUS is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

TELUS beats Telecom Italia on 12 of the 16 factors compared between the two stocks.

About Telecom Italia

Telecom Italia S.p.A., together with its subsidiaries, engages in the provision of fixed and mobile telecommunications services in Italy and internationally. The company operates through Domestic, Brazil, and Other Operations segments. It offers fixed and mobile voice and Internet, and public telephony services, as well as products managed and developed for individuals and families; and voice, data, and Internet services and products, and information and communications technology solutions for top, public sector and large account customers. The company also manages and develops a portfolio of regulated and unregulated wholesale services for fixed-line and mobile telecommunications operators; and development, engineering, construction, and operation of network infrastructures, information technology (IT), and systems and properties. Telecom Italia S.p.A. was incorporated in 1908 and is based in Milan, Italy.

About TELUS

TELUS Corporation, together with its subsidiaries, provides a range of telecommunications and information technology products and services in Canada. It operates through Technology Solutions and Digitally-Led Customer Experiences segments. The Technology Solutions segment offers a range of telecommunications products and services; network services; healthcare services; mobile technologies equipment; data services, such as internet protocol; television; hosting, managed information technology, and cloud-based services; software, data management, and data analytics-driven smart food-chain and consumer goods technologies; home and business security; healthcare software and technology solutions; and voice and other telecommunications services, as well as mobile and fixed voice and data telecommunications services and products. The Digitally-Led Customer Experiences segment provides digital customer experience and digital-enablement transformation solutions, including artificial intelligence and content management solutions. The company was formerly known as TELUS Communications Inc. and changed its name to TELUS Corporation in February 2005. TELUS Corporation was incorporated in 1998 and is based in Vancouver, Canada.