Financial Comparison: Globalstar (NASDAQ:GSAT) & Telephone and Data Systems (NYSE:TDS)

Globalstar (NASDAQ:GSAT) and Telephone and Data Systems (NYSE:TDS) are both communication services companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Insider & Institutional Ownership

18.9% of Globalstar shares are owned by institutional investors. Comparatively, 80.0% of Telephone and Data Systems shares are owned by institutional investors. 60.0% of Globalstar shares are owned by company insiders. Comparatively, 14.2% of Telephone and Data Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Globalstar and Telephone and Data Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Globalstar	-22.25%	-16.66%	-2.43%
Telephone and Data Systems	33.20%	11.97%	6.04%

Valuation & Earnings

This table compares Globalstar and Telephone and Data Systems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Globalstar	$272.99 million	38.91	-$8.65 million	($0.51)	-160.76
Telephone and Data Systems	$1.23 billion	3.54	-$6.24 million	$3.00	12.58

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Globalstar and Telephone and Data Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Globalstar	1	4	1	0	2.00
Telephone and Data Systems	0	3	2	0	2.40

Globalstar presently has a consensus target price of $75.67, suggesting a potential downside of 7.71%. Telephone and Data Systems has a consensus target price of $47.50, suggesting a potential upside of 25.83%. Given Telephone and Data Systems’ stronger consensus rating and higher probable upside, analysts plainly believe Telephone and Data Systems is more favorable than Globalstar.

Volatility and Risk

Globalstar has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Telephone and Data Systems has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Summary

Telephone and Data Systems beats Globalstar on 11 of the 14 factors compared between the two stocks.

About Globalstar

Globalstar, Inc. provides mobile satellite services worldwide. The company offers duplex two-way voice and data products, including mobile voice and data satellite communications services and equipment for remote business continuity, recreational usage, safety, emergency preparedness and response, and other applications; fixed voice and data satellite communications services and equipment at industrial, commercial, and residential sites, as well as rural villages and ships; and data modem services and equipment. It also provides SPOT consumer retail products, such as SPOT satellite GPS messenger for personal tracking, emergency location, and messaging solutions; and SPOT Trace, an anti-theft and asset tracking device. In addition, the company offers commercial Internet of Things one-way transmission products to track cargo containers and rail cars, as well as to monitor utility meters, and oil and gas assets. Further, it sells wholesale minutes to independent gateway operators (IGOs); and provides engineering services, such as hardware and software designs to develop specific applications; and installation of gateways and antennas. The company distributes its products directly, as well as through independent agents, dealers and resellers, retailers, IGOs, and sales force and e-commerce Website. As of December 31, 2020, it had approximately 745,000 subscribers. The company primarily serves recreation and personal, government, public safety and disaster relief, oil and gas, maritime and fishing, construction, utilities, and transportation, as well as natural resources, mining, and forestry markets. Globalstar, Inc. has a strategic alliance with XCOM Labs to jointly commercialize XCOM’s capacity-multiplying technology with Globalstar’s Band n53 for 5G deployments in the United States and other countries where Globalstar has terrestrial rights. The company was founded in 1993 and is headquartered in Covington, Louisiana.

About Telephone and Data Systems

Telephone and Data Systems, Inc., a telecommunications company, provides communications services in the United States. It operates through two segments: UScellular and TDS Telecom. The company offers wireless solutions to consumers, and business and government customers, including a suite of connected Internet of things (IoT) solutions, and software applications for monitor and control, business automation/operations, communication, fleet and asset management, smart water solutions, private cellular networks and custom, and end-to-end IoT solutions; wireless priority services and quality priority and preemption options; smartphones and other handsets, tablets, wearables, mobile hotspots, fixed wireless home internet, and IoT devices; and accessories, such as cases, screen protectors, chargers, and memory cards, as well as consumer electronics, including audio, home automation and networking products. It also provides replace and repair services; Trade-In program through which it buys customers' used equipment; internet connections and all-home Wi-Fi services; TDS TV+, an integrated cloud television platform that offers video content and features; local and long-distance telephone service, voice over internet protocol, and enhanced services; broadband, IP-based services, and hosted voice and video collaboration services; and communication services in underserved areas. The company sells its products through retail stores, direct and indirect sales, third-party retailers, and independent agents, as well as through ecommerce and telesales. Telephone and Data Systems, Inc. was incorporated in 1968 and is headquartered in Chicago, Illinois.