Analyzing Swisscom (OTCMKTS:SCMWY) and Telecom Italia (OTCMKTS:TIAOD)

Telecom Italia (OTCMKTS:TIAOD) and Swisscom (OTCMKTS:SCMWY) are both communication services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Valuation and Earnings

This table compares Telecom Italia and Swisscom”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telecom Italia	N/A	N/A	N/A	$0.07	129.00
Swisscom	$18.16 billion	22.18	$1.53 billion	$3.20	24.30

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

Analyst Recommendations

This is a summary of current ratings and target prices for Telecom Italia and Swisscom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telecom Italia	0	0	0	0	0.00
Swisscom	4	5	0	0	1.56

Profitability

This table compares Telecom Italia and Swisscom’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
Swisscom	8.86%	11.30%	3.71%

Institutional & Insider Ownership

35.6% of Telecom Italia shares are held by institutional investors. 1.0% of Swisscom shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Swisscom beats Telecom Italia on 7 of the 9 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 Swisscom

Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally. It operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. The company offers mobile and fixed-network services, such as telephony, TV, broadband, and mobile offerings, as well as sells terminal equipment; and telecom and communications solutions for large corporations and small and medium-sized enterprises. It 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, the company 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, mobile offerings, and broadband services, as well as ICT solutions for residential, business, and wholesale customers. Further, it 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. The company was founded in 1998 and is based in Bern, Switzerland.