Head to Head Analysis: Telephone and Data Systems (TDS) & America Movil (AMX)
Telephone and Data Systems (NYSE: TDS) and America Movil (NYSE:AMX) are both mid-cap utilities companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.
Telephone and Data Systems pays an annual dividend of $0.62 per share and has a dividend yield of 2.3%. America Movil pays an annual dividend of $0.17 per share and has a dividend yield of 1.0%. Telephone and Data Systems pays out -48.8% of its earnings in the form of a dividend. America Movil pays out 29.8% 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. Telephone and Data Systems has increased its dividend for 42 consecutive years. Telephone and Data Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
83.7% of Telephone and Data Systems shares are owned by institutional investors. Comparatively, 7.5% of America Movil shares are owned by institutional investors. 17.3% of Telephone and Data Systems shares are owned by company insiders. Comparatively, 1.0% of America Movil shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Telephone and Data Systems and America Movil’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Telephone and Data Systems||$5.10 billion||0.59||$43.00 million||($1.27)||-21.51|
|America Movil||$52.35 billion||1.07||$417.00 million||$0.57||29.88|
America Movil has higher revenue and earnings than Telephone and Data Systems. Telephone and Data Systems is trading at a lower price-to-earnings ratio than America Movil, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for Telephone and Data Systems and America Movil, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telephone and Data Systems||0||1||1||0||2.50|
America Movil has a consensus price target of $17.50, indicating a potential upside of 2.76%. Given America Movil’s higher possible upside, analysts clearly believe America Movil is more favorable than Telephone and Data Systems.
Risk & Volatility
Telephone and Data Systems has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, America Movil has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.
This table compares Telephone and Data Systems and America Movil’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telephone and Data Systems||-2.77%||1.08%||0.55%|
America Movil beats Telephone and Data Systems on 9 of the 17 factors compared between the two stocks.
Telephone and Data Systems Company Profile
Telephone and Data Systems, Inc. is a diversified telecommunications company. The Company is engaged in conducting its Wireless operations through its subsidiary, United States Cellular Corporation (U.S. Cellular), as well as providing its wireline services, cable services, and hosted and managed services (HMS), through its subsidiary, TDS Telecommunications Corporation (TDS Telecom). It operates through four business segments: U.S. Cellular, Wireline, Cable, and Hosted and Managed Services. U.S. Cellular provides service to postpaid and prepaid customers. Wireline operations provide retail telecommunications services to both residential and commercial customers. Wireline offers services, including broadband, video, voice and network access services. Cable offers broadband, video and voice services under TDS and BendBroadband brand names. It provides a range of information technology (IT) services, including colocation, and cloud and hosting solutions through its HMS business.
America Movil Company Profile
America Movil, S.A.B. de C.V. is a holding company. The Company provides telecommunications services. Its services include mobile and fixed-line voice services, wireless and fixed data services, Internet access and pay television, sales of equipment, accessories and computers, as well as other related services. Its segments are Mexico Wireless, Mexico Fixed, Brazil, Colombia, Southern Cone, Andean Region, Central America, the Caribbean, the United States and Europe. The Southern Cone segment includes Argentina, Chile, Paraguay and Uruguay. The Andean Region segment includes Ecuador and Peru. The Central America segment includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. The Caribbean segment includes the Dominican Republic and Puerto Rico. The Europe segment includes Austria, Belarus, Bulgaria, Croatia, Macedonia, Serbia and Slovenia. It operates in all of its geographic segments under the Claro brand, except in Mexico, the United States and Europe.
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