RR Media (NASDAQ: RRM) and NTT Docomo (NYSE:DCM) are both telecommunications services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Institutional & Insider Ownership

0.5% of NTT Docomo shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

RR Media pays an annual dividend of $0.28 per share. NTT Docomo pays an annual dividend of $0.75 per share and has a dividend yield of 3.1%. RR Media pays out 60.9% of its earnings in the form of a dividend. NTT Docomo pays out 43.4% 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. NTT Docomo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and price targets for RR Media and NTT Docomo, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RR Media 0 0 0 0 N/A
NTT Docomo 0 5 0 0 2.00

Valuation and Earnings

This table compares RR Media and NTT Docomo’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RR Media N/A N/A N/A $0.46 N/A
NTT Docomo $42.41 billion 2.29 $6.07 billion $1.73 14.19

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

Profitability

This table compares RR Media and NTT Docomo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RR Media 3.49% 5.83% 3.07%
NTT Docomo 15.25% 12.38% 9.34%

Summary

NTT Docomo beats RR Media on 8 of the 9 factors compared between the two stocks.

RR Media Company Profile

MX1 Ltd, formerly RR Media Ltd, is an Israel-based global media services provider. It is a media globalize company that works with media businesses to transform content into a viewer experience for a global audience. MX1 Ltd offers a range of content management, delivery and digital media services. It distributes more than 1000 television (TV) channels, manages the play out of more than 400 channels and delivers syndicated content to more than 120 subscription Video on Demand (VOD) platforms. The Company has offices worldwide and operates global media centers, enabling customers to reach people around the world. MX1 Ltd is a wholly-owned subsidiary of SES, Euronext Paris and Luxembourg Stock Exchange: SESG.

NTT Docomo Company Profile

NTT DOCOMO, INC. (DOCOMO) is a mobile telecommunications carrier. The Company operates through three segments: telecommunications business, smart life business and other businesses. The telecommunications business segment includes mobile phone services (long-term evolution (LTE) (Xi) services and freedom of mobile multimedia access (FOMA) services), optical-fiber broadband service, satellite mobile communications services, international services and equipment sales related to these services. The smart life business segment includes video and music distribution, electronic books and other services offered through its dmarket portal, as well as finance/payment services, shopping services and various other services to support the Company’s customers’ daily lives. Its other businesses segment primarily includes Mobile Device Protection Service, as well as the development, sale and maintenance of information technology (IT) systems.

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