Head-To-Head Review: TIM Participacoes (TSU) and T-Mobile Us (PCS)

TIM Participacoes (NYSE: TSU) and T-Mobile Us (NYSE:PCS) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares TIM Participacoes and T-Mobile Us’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TIM Participacoes $4.50 billion 2.19 $215.14 million $0.63 32.32
T-Mobile Us N/A N/A N/A $0.24 49.33

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

Analyst Recommendations

This is a summary of recent ratings and price targets for TIM Participacoes and T-Mobile Us, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TIM Participacoes 0 1 6 0 2.86
T-Mobile Us 0 2 6 0 2.75

TIM Participacoes presently has a consensus price target of $19.50, suggesting a potential downside of 4.22%. T-Mobile Us has a consensus price target of $70.13, suggesting a potential upside of 492.27%. Given T-Mobile Us’ higher probable upside, analysts plainly believe T-Mobile Us is more favorable than TIM Participacoes.

Dividends

TIM Participacoes pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. T-Mobile Us does not pay a dividend. TIM Participacoes pays out 25.4% of its earnings in the form of a dividend. T-Mobile Us has raised its dividend for 5 consecutive years.

Profitability

This table compares TIM Participacoes and T-Mobile Us’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TIM Participacoes 5.57% 5.71% 3.02%
T-Mobile Us N/A N/A N/A

Institutional and Insider Ownership

15.5% of TIM Participacoes shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

TIM Participacoes beats T-Mobile Us on 8 of the 12 factors compared between the two stocks.

About TIM Participacoes

TIM Participacoes S.A. (TIM) is a provider of mobile telecommunication services in Brazil. The Company, through its subsidiaries in various telecommunications markets, operates mobile, fixed and long distance telephony, data transmission and ultra-broadband services. Its direct subsidiaries include TIM Celular S.A., which provides landline telephone services (commuted fixed telephonic service (STFC))-domestic long distance and international long distance voice services, personal mobile service (SMP) and multimedia communication service (multimedia service of communication (SCM)) in all Brazilian states and in the Federal District, and Intelig Telecomunicacoes Ltda., which provides STFC-local voices services and SCM services in all Brazilian states and in the Federal District. Its consumer plans include prepaid plans, post-paid plans and controle plans. It offers value-added services, including short message services or text messaging, multimedia messaging services and push-mail.

About T-Mobile Us

MetroPCS Communications, Inc. (MetroPCS Communications) is a facilities-based wireless broadband mobile communications provider in the United States, including the Atlanta, Boston, Dallas/Fort Worth, Detroit, Las Vegas, Los Angeles, Miami, New York, Orlando/Jacksonville, Philadelphia, Sacramento, San Francisco, and Tampa/Sarasota metropolitan areas. It offers wireless broadband mobile services under the MetroPCS brand in selected metropolitan areas in the United States. It provides a variety of wireless broadband mobile communications services to its customers on a no long-term contract, paid-in-advance basis. As of December 31, 2011, it had over 9.3 million customers. All of its services are provided through wholly owned subsidiaries of MetroPCS Wireless, Inc., an indirect wholly owned subsidiary of MetroPCS Communications. In January 2011, it introduced long term evolution (4G LTE) service plans.

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