Critical Contrast: Swisscom (OTCMKTS:SCMWY) versus IHS (NYSE:IHS)

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

Institutional & Insider Ownership

17.5% of IHS shares are owned by institutional investors. 1.0% of Swisscom shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Swisscom has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500. Comparatively, IHS has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Swisscom and IHS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Swisscom	3	5	0	0	1.62
IHS	1	4	2	0	2.14

IHS has a consensus price target of $8.80, suggesting a potential upside of 3.83%. Given IHS’s stronger consensus rating and higher possible upside, analysts clearly believe IHS is more favorable than Swisscom.

Valuation and Earnings

This table compares Swisscom and IHS”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Swisscom	$18.16 billion	24.54	$1.53 billion	$3.13	27.48
IHS	$1.58 billion	1.81	$143.60 million	$0.40	21.19

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Swisscom	8.73%	11.18%	3.65%
IHS	8.17%	-832.09%	11.80%

Summary

Swisscom beats IHS on 8 of the 14 factors compared between the two stocks.

About Swisscom

Swisscom AG is a telecommunications and information technology company headquartered in Switzerland. It provides mobile and fixed-line phone services, broadband internet, television and related digital services to residential and business customers. Its business offerings also include IT, cloud and cybersecurity solutions. Swisscom serves customers in Switzerland and Italy. In Italy, it operates through Fastweb; following the integration of Vodafone Italia, the business operates under the Fastweb + Vodafone name.

About IHS

IHS Towers, formally IHS Holding Limited, is an independent owner and operator of shared telecommunications infrastructure. Founded in 2001, the company began in Nigeria and expanded into a multinational provider of infrastructure used by mobile network operators. Its assets and services include wireless communications towers, fiber-optic networks and other infrastructure that help telecom providers extend coverage and capacity. By sharing sites and related facilities among customers, IHS supports the deployment and operation of mobile networks.