NTT (OTCMKTS:NTTYY) and AT&T (NYSE:T) Financial Survey

NTT (OTCMKTS:NTTYY) and AT&T (NYSE:T) are both large-cap communication services companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, dividends, profitability, earnings, risk, analyst recommendations and institutional ownership.

Risk and Volatility

NTT has a beta of 0.07, indicating that its stock price is 93% less volatile than the S&P 500. Comparatively, AT&T has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

Profitability

This table compares NTT and AT&T’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NTT	6.29%	9.10%	1.97%
AT&T	10.19%	13.41%	3.92%

Institutional and Insider Ownership

0.1% of NTT shares are owned by institutional investors. Comparatively, 57.1% of AT&T shares are owned by institutional investors. 0.1% of AT&T shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares NTT and AT&T”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NTT	$95.72 billion	0.87	$6.84 billion	$1.84	13.80
AT&T	$128.85 billion	1.13	$21.95 billion	$1.85	11.68

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

Dividends

NTT pays an annual dividend of $0.64 per share and has a dividend yield of 2.5%. AT&T pays an annual dividend of $1.11 per share and has a dividend yield of 5.1%. NTT pays out 34.8% of its earnings in the form of a dividend. AT&T pays out 60.0% 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for NTT and AT&T, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NTT	0	1	0	1	3.00
AT&T	1	9	12	0	2.50

AT&T has a consensus price target of $27.56, suggesting a potential upside of 27.53%. Given AT&T’s higher probable upside, analysts plainly believe AT&T is more favorable than NTT.

Summary

AT&T beats NTT on 13 of the 17 factors compared between the two stocks.

About NTT

Nippon Telegraph and Telephone Corporation operates as a telecommunications company in Japan and internationally. It operates through Integrated ICT Business, Regional Communications Business, Global Solutions Business, and Others segments. The Integrated ICT Business segment offers mobile phone, domestic inter-prefectural communications, international communications, solutions, and system development and related services. The Regional Communications Business segment provides intra-prefectural communications and related ancillary services. The Global Solutions Business segment offers consulting, system and software development, network system, cloud, global data center, and related services. The Others segment engages in the real estate, energy, and other businesses. The company was founded in 1952 and is headquartered in Tokyo, Japan.

About AT&T

AT&T, Inc. is a holding company, which engages in the provision of telecommunications and technology services. It operates through the Communications and Latin America segments. The Communications segment offers wireless, wireline telecom, and broadband services to businesses and consumers located in the US and businesses globally. The Latin America segment provides wireless services and equipment in Mexico. The company was founded in 1983 and is headquartered in Dallas, TX.