Analyzing Vodafone Group (NASDAQ:VOD) and KT (NYSE:KT)

Vodafone Group (NASDAQ:VOD) and KT (NYSE:KT) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, profitability, analyst recommendations, risk and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Vodafone Group and KT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vodafone Group	2	4	1	0	1.86
KT	0	0	2	1	3.33

Vodafone Group presently has a consensus price target of $136.00, indicating a potential upside of 1,094.03%. Given Vodafone Group’s higher possible upside, research analysts plainly believe Vodafone Group is more favorable than KT.

Institutional and Insider Ownership

7.8% of Vodafone Group shares are owned by institutional investors. Comparatively, 18.9% of KT shares are owned by institutional investors. 1.0% of Vodafone Group shares are owned by insiders. Comparatively, 1.0% of KT shares are owned by insiders. 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.

Profitability

This table compares Vodafone Group and KT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vodafone Group	N/A	N/A	N/A
KT	3.35%	5.06%	2.22%

Volatility and Risk

Vodafone Group has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, KT has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Valuation and Earnings

This table compares Vodafone Group and KT”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vodafone Group	$39.39 billion	0.70	-$4.48 billion	$1.14	9.99
KT	$19.37 billion	0.52	$321.90 million	$1.35	14.39

KT has lower revenue, but higher earnings than Vodafone Group. Vodafone Group is trading at a lower price-to-earnings ratio than KT, indicating that it is currently the more affordable of the two stocks.

Dividends

Vodafone Group pays an annual dividend of $0.49 per share and has a dividend yield of 4.3%. KT pays an annual dividend of $0.71 per share and has a dividend yield of 3.7%. Vodafone Group pays out 43.0% of its earnings in the form of a dividend. KT pays out 52.6% 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. Vodafone Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

KT beats Vodafone Group on 11 of the 16 factors compared between the two stocks.

About Vodafone Group

Vodafone Group Public Limited Company provides telecommunication services in Europe and internationally. It offers mobile connectivity services comprising end-to-end services for mobile voice and data, messaging, device management, BYOx, and telecoms management, as well as professional and consulting services; and fixed line connectivity, such as fixed voice and data, broadband, software-defined networks, managed WAN, LAN, ethernet, and satellite; and financial services, as well as business and merchant services. The company also provides consumer Internet of Things (IoT) propositions, as well as security and insurance products; mobile services; logistics, fleet management, and smart metering services; WiFi; digital services comprising mobile application development, multi-access edge computing, worker insights, AI assistant, drone detection, visual inspection, and mixed reality, as well as Vodafone Analytics platform; and traditional IT hosting services, including colocation, managed hosting, security, hosting infrastructure, and flexible computing for government. In addition, it offers integrated business communication services, as well as fixed mobile convergence services; and carrier services, as well as IoT devices comprising managed tablets and integrated terminals. Further, it offers M-Pesa, an African mobile money platform to make payments and provide financial services; Vodafone Business multi-cloud platform; and productivity solutions, as well as operates digital cloud-based television platforms. It serves private and public sector customers in the manufacturing, retail, automotive, banking finance, healthcare, smart cities and public, agriculture, transport and logistics, and energy and utilities management industries. It offers its products and services through digital and physical channels. Vodafone Group Public Limited Company has a strategic partnership with Open Fiber. The company was incorporated in 1984 and is based in Newbury, the United Kingdom.

About KT

KT Corporation provides integrated telecommunications and platform services in Korea and internationally. The company offers mobile voice and data telecommunications services based on 5G, 4G LTE and 3G W-CDMA technology; fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services; broadband Internet access service and other Internet-related services; and data communication services, such as fixed-line and leased line services, as well as broadband Internet connection services. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and web comics and novels services; and credit card processing and other financial services. In addition, the company offers information technology and network services, and satellite services; sells handsets and miscellaneous telecommunications equipment; develops and sells residential units and commercial real estate; and rents real estate properties. Further, it maintains public telephones; offers security, B2C and B2B, investment fund, software development and data processing, value added network, call center, system integration and maintenance, marketing, PCS distribution, truck transportation and trucking arrangement business, cloud system implementation, satellite communication network, installation and management, and data center development and related services. Additionally, the company is involved in the Internet banking ASP and security solutions, residential building development and supply, sports team management, technology business finance, and submarine cable construction and maintenance businesses. The company was formerly known as Korea Telecom Corp. and changed its name to KT Corporation in March 2002. KT Corporation was founded in 1981 and is headquartered in Seongnam-si, South Korea.