SoftBank Group (OTCMKTS:SFTBY) versus KDDI (OTCMKTS:KDDIY) Critical Contrast

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

Institutional & Insider Ownership

0.1% of KDDI shares are owned by institutional investors. Comparatively, 0.0% of SoftBank Group shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

KDDI pays an annual dividend of $0.35 per share and has a dividend yield of 2.0%. SoftBank Group pays an annual dividend of $0.10 per share and has a dividend yield of 0.2%. KDDI pays out 27.8% of its earnings in the form of a dividend. SoftBank Group pays out 1.4% 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.

Earnings and Valuation

This table compares KDDI and SoftBank Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KDDI	$38.86 billion	1.86	$4.53 billion	$1.26	13.67
SoftBank Group	$47.57 billion	3.08	$7.71 billion	$7.28	7.04

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

Risk & Volatility

KDDI has a beta of 0.06, indicating that its stock price is 94% less volatile than the S&P 500. Comparatively, SoftBank Group has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Profitability

This table compares KDDI and SoftBank Group’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
SoftBank Group	41.42%	22.08%	6.80%

Analyst Recommendations

This is a summary of current ratings and price targets for KDDI and SoftBank Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KDDI	0	1	0	0	2.00
SoftBank Group	0	2	0	0	2.00

Summary

SoftBank Group beats KDDI on 9 of the 12 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 SoftBank Group

SoftBank Group Corp. provides telecommunication services in Japan and internationally. It operates through Investment Business of Holding Companies, SoftBank Vision Funds, SoftBank, Arm, and Other segments. The company offers mobile communications and solutions to enterprise customers, and broadband services to retail customers; and sells mobile devices and software tools, as well as related services. It also provides internet advertising and e-commerce services; payment and financial services; ICT services products to enterprise customers; and communication device-related products and IoT equipment to retail customers. In addition, the company engages in design of microprocessor intellectual property and related technology; alternative investment management; ownership of professional baseball team; operation of baseball games; management and maintenance of baseball stadium and other sports facilities; distribution of video, voice, and data content via media businesses. Further, it engages in the certification services, security solutions, and Linux / OSS businesses; operation of comprehensive IT information site ITmedia; sale of indirect materials such as consumable supplies; facility management; planning and operation of fashion e-commerce website; operational support of brands' own e-commerce website; operation of fashion coordination app; management of few funds; generation of electricity from renewable energy sources; and supply and sale of electricity. The company was formerly known as SoftBank Corp. and changed its name to SoftBank Group Corp. in July 2015. SoftBank Group Corp. was incorporated in 1981 and is headquartered in Tokyo, Japan.