Tele2 (OTCMKTS:TLTZY) and KDDI (OTCMKTS:KDDIY) Head-To-Head Analysis

Tele2 (OTCMKTS:TLTZY) and KDDI (OTCMKTS:KDDIY) are both large-cap communication services companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Dividends

Tele2 pays an annual dividend of $0.28 per share and has a dividend yield of 3.2%. KDDI pays an annual dividend of $0.30 per share and has a dividend yield of 1.6%. Tele2 pays out 35.9% of its earnings in the form of a dividend. KDDI pays out 24.2% 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 current ratings and recommmendations for Tele2 and KDDI, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tele2	0	3	2	1	2.67
KDDI	1	0	0	1	2.50

Risk and Volatility

Tele2 has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500. Comparatively, KDDI has a beta of 0.05, suggesting that its stock price is 95% less volatile than the S&P 500.

Profitability

This table compares Tele2 and KDDI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tele2	33.96%	43.42%	15.54%
KDDI	N/A	N/A	N/A

Valuation & Earnings

This table compares Tele2 and KDDI”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tele2	$3.06 billion	3.88	$468.79 million	$0.78	11.08
KDDI	$40.34 billion	1.81	$4.67 billion	$1.24	14.73

KDDI has higher revenue and earnings than Tele2. Tele2 is trading at a lower price-to-earnings ratio than KDDI, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

0.1% of KDDI shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Tele2 beats KDDI on 8 of the 14 factors compared between the two stocks.

About Tele2

Tele2 AB (publ) provides fixed and mobile connectivity, handset related data services, and entertainment services in Sweden, Lithuania, Latvia, and Estonia. The company offers mobile telephony and data, fixed broadband, fixed telephony, switch and contact center, cloud services, IT services, network services, workplace, video and collaboration, united communications, and security services. The company also provides data network services, including dark fiber, dedicated wavelength, ethernet and IP VPN, and internet services; and unified communications comprising service provider, mobile virtual network operator, and carrier SIP-interconnect services. In addition, it offers single and dual IMSI solutions for consumer and IoT applications; on-demand roaming services, such as subscription management, data plan management, real time charging, eSIM delivery, SIM management, and set up services; routing and termination solutions for international voice traffic; application-2-person messaging services; and value-added services comprising shortcodes and long numbers for businesses to have 2-way communication with their customers. The company was incorporated in 1990 and is headquartered in Kista, Sweden.

About KDDI

KDDI Corporation provides telecommunications services in Japan and internationally. It operates in two segments, Personal Services and Business Services. The Personal Services segment offers telecommunication services and other services such as finance, energy, and LX through its multi-brands au, UQ mobile, and povo. The Business Services segment offers smartphones and other devices, network and cloud services, and data center services to corporate customers under the TELEHOUSE brand. The company was incorporated in 1984 and is headquartered in Tokyo, Japan.