Telephone & Data Systems (NYSE:TDS) and PLDT (NYSE:PHI) are both mid-cap utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.
This table compares Telephone & Data Systems and PLDT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telephone & Data Systems||3.53%||1.98%||1.05%|
Telephone & Data Systems pays an annual dividend of $0.64 per share and has a dividend yield of 2.2%. PLDT pays an annual dividend of $0.89 per share and has a dividend yield of 3.5%. Telephone & Data Systems pays out 120.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PLDT pays out 35.2% of its earnings in the form of a dividend. Telephone & Data Systems has raised its dividend for 43 consecutive years. PLDT is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
81.7% of Telephone & Data Systems shares are held by institutional investors. Comparatively, 6.7% of PLDT shares are held by institutional investors. 17.3% of Telephone & Data Systems shares are held by company insiders. 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.
Risk and Volatility
Telephone & Data Systems has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, PLDT has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Telephone & Data Systems and PLDT, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telephone & Data Systems||1||0||3||0||2.50|
Telephone & Data Systems currently has a consensus price target of $36.50, suggesting a potential upside of 23.48%. Given Telephone & Data Systems’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Telephone & Data Systems is more favorable than PLDT.
Valuation & Earnings
This table compares Telephone & Data Systems and PLDT’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Telephone & Data Systems||$5.04 billion||0.66||$153.00 million||$0.53||55.77|
|PLDT||$3.17 billion||1.72||$264.74 million||$2.53||9.98|
PLDT has lower revenue, but higher earnings than Telephone & Data Systems. PLDT is trading at a lower price-to-earnings ratio than Telephone & Data Systems, indicating that it is currently the more affordable of the two stocks.
Telephone & Data Systems beats PLDT on 9 of the 17 factors compared between the two stocks.
Telephone & Data Systems Company Profile
Telephone and Data Systems, Inc., a telecommunications company, provides wireless, wireline, cable, and hosted and managed services in the United States. The company offers cellular services, such as postpaid national plans and prepaid service plans with voice, messaging, and data usage options; and business rate plans. It also offers wireless devices comprising handsets, tablets, mobile hotspots, home phones, and routers; and including accessories, including wireless basics, such as cases, screen protectors, chargers, and memory cards, as well as an assortment of consumer electronics comprising headphones, speakers, wearables, and home automation products. In addition, the company provides wireline and cable broadband services; digital television (TV) and digital satellite TV video services; voice services comprising local and long-distance telephone, voice over Internet protocol, find me follow me, collaboration, instant messaging, and other services; and network access services. Further, it offers a range of information technology (IT) services, including colocation, cloud and hosting solutions, managed services, and enterprise resource planning application management services; sells IT hardware, as well as provides related maintenance and professional services; and engages in planning, engineering, procurement, sale, installation, and management of IT-infrastructure solutions. Additionally, the company operates retail stores and kiosks. The company serves approximately 5.1 million wireless customers and 1.2 million wireline and cable customers. Telephone and Data Systems, Inc. sells its products through retail sales, direct sales, third-party retailers, and independent agents, as well as through Website and telesales. The company was founded in 1968 and is headquartered in Chicago, Illinois.
PLDT Company Profile
PLDT Inc. operates as a telecommunications company in the Philippines. The company's Wireless segment offers cellular mobile, Internet broadband distribution, operations support, mobile applications and digital platforms development, mobile payment, solutions and systems integration, satellite communications, and satellite information and messaging services. It also operates as a content provider; develops and maintains IT-based solutions for communications and e-commerce platforms; develops financial technology solutions; provides insurance products; markets, sells, and distributes payment solutions and other related services; and sells Wi-Fi access equipment. As of December 31, 2017, this segment served 58,531,262 wireless subscribers. Its Fixed Line segment provides fixed line telecommunications services; business infrastructure and solutions; intelligent data processing and implementation, and data analytics insight generation services; and information and communications infrastructure for Internet-based services, e-commerce, customer relationship management, and information technology (IT) related services. This segment also offers managed IT outsourcing, Internet-based purchasing, IT consulting and professional, bills printing and other related value-added, and air transportation services, as well as distributes Filipino channels and content services. As of December 31, 2017, it had 2,663,210 fixed line subscribers. The company has a strategic partnership with Rocket Internet SE to develop online and mobile payment solutions. The company was formerly known as Philippine Long Distance Telephone Company and changed its name to PLDT Inc. in July 2016. PLDT Inc. was founded in 1928 and is based in Makati City, the Philippines.
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