Reviewing Telenor ASA (OTCMKTS:TELNY) & Swisscom (OTCMKTS:SCMWY)

Telenor ASA (OTCMKTS:TELNY) and Swisscom (OTCMKTS:SCMWY) are both large-cap communication services companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Dividends

Telenor ASA pays an annual dividend of $0.69 per share and has a dividend yield of 4.8%. Swisscom pays an annual dividend of $2.03 per share and has a dividend yield of 2.4%. Telenor ASA pays out 45.4% of its earnings in the form of a dividend. Swisscom pays out 63.4% 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. Telenor ASA is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Telenor ASA and Swisscom”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telenor ASA	$7.38 billion	2.66	$678.08 million	$1.52	9.44
Swisscom	$18.16 billion	24.28	$1.53 billion	$3.20	26.59

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

Analyst Recommendations

This is a summary of current recommendations for Telenor ASA and Swisscom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telenor ASA	2	2	0	3	2.57
Swisscom	3	5	0	0	1.62

Profitability

This table compares Telenor ASA and Swisscom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telenor ASA	26.85%	16.94%	5.86%
Swisscom	8.86%	11.31%	3.72%

Risk and Volatility

Telenor ASA has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500. Comparatively, Swisscom has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Summary

Telenor ASA beats Swisscom on 8 of the 13 factors compared between the two stocks.

About Telenor ASA

Telenor ASA, together with its subsidiaries, operates as a telecommunication company worldwide. It operates through four segments: Nordics, Asia, Infrastructure, and Amp. The company offers mobile subscriptions and handsets, telephony, broadband, data security, communications services, and TV services to residential and business customers, as well as wholesale services. It also builds, develops, maintains, and leases passive telecom infrastructure, such as towers, masts, and buildings. The company also provides machine-to-machine, internet-of-things, and inbound and national roaming services. Telenor ASA was founded in 1855 and is headquartered in Fornebu, Norway.

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.