Analyzing TIM (NYSE:TIMB) & KDDI (OTCMKTS:KDDIY)

KDDI (OTCMKTS:KDDIY) and TIM (NYSE:TIMB) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Institutional & Insider Ownership

0.1% of KDDI shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for KDDI and TIM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KDDI	1	0	0	0	1.00
TIM	0	6	3	0	2.33

TIM has a consensus target price of $21.50, suggesting a potential upside of 0.47%. Given TIM’s stronger consensus rating and higher probable upside, analysts clearly believe TIM is more favorable than KDDI.

Dividends

KDDI pays an annual dividend of $0.35 per share and has a dividend yield of 2.3%. TIM pays an annual dividend of $0.93 per share and has a dividend yield of 4.3%. KDDI pays out 34.7% of its earnings in the form of a dividend. TIM pays out 72.1% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KDDI	N/A	N/A	N/A
TIM	13.91%	13.99%	6.37%

Volatility & Risk

KDDI has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500. Comparatively, TIM has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KDDI	$38.86 billion	1.67	$4.53 billion	$1.01	15.35
TIM	$4.72 billion	2.20	$584.73 million	$1.29	16.59

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

Summary

TIM beats KDDI on 11 of the 15 factors compared between the two stocks.

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.

About TIM

TIM S.A., a telecommunications company, provides mobile voice, data, and broadband services in Brazil. The company offers in mobile, landline, long-distance, and data transmission services. It also offers fixed ultra-broadband, fixed ultraband broadband, and digital content services. The company serves individuals and corporates, as well as small, medium, and large companies. TIM S.A is based in Rio de Janeiro, Brazil. The company operates as a subsidiary of TIM Brasil Serviços e Participações S.A.