Analyzing BCE (NYSE:BCE) and Deutsche Telekom (OTCMKTS:DTEGY)

BCE (NYSE:BCE) and Deutsche Telekom (OTCMKTS:DTEGY) are both large-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Institutional & Insider Ownership

41.5% of BCE shares are held by institutional investors. 0.2% of BCE shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares BCE and Deutsche Telekom”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BCE	$24.47 billion	0.92	$4.62 billion	$4.91	4.91
Deutsche Telekom	$134.70 billion	1.26	$10.87 billion	$2.21	15.71

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

Risk and Volatility

BCE has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Deutsche Telekom has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for BCE and Deutsche Telekom, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BCE	1	3	4	1	2.56
Deutsche Telekom	1	0	2	0	2.33

BCE currently has a consensus target price of $28.67, indicating a potential upside of 18.92%. Given BCE’s stronger consensus rating and higher probable upside, equities research analysts clearly believe BCE is more favorable than Deutsche Telekom.

Dividends

BCE pays an annual dividend of $1.28 per share and has a dividend yield of 5.3%. Deutsche Telekom pays an annual dividend of $1.88 per share and has a dividend yield of 5.4%. BCE pays out 26.1% of its earnings in the form of a dividend. Deutsche Telekom pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares BCE and Deutsche Telekom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BCE	26.14%	15.39%	3.49%
Deutsche Telekom	8.03%	10.53%	3.36%

Summary

BCE beats Deutsche Telekom on 12 of the 17 factors compared between the two stocks.

About BCE

BCE Inc., a communications company, provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. The company operates through two segments, Bell Communication and Technology Services, and Bell Media. The Bell Communication and Technology Services segment provides wireless products and services including mobile data and voice plans and devices; wireline products and services comprising data, including internet access, internet protocol television, cloud-based services, and business solutions, as well as voice, and other communication services and products; and satellite TV and connectivity services for residential, small and medium-sized business, government, and large enterprise customers. This segment also buys and sells local telephone, long distance, and data and other services from or to resellers and other carriers; and operates consumer electronics retail stores. The Bell Media segment provides conventional TV, specialty TV, pay TV, streaming services, digital media services, radio broadcasting services, and out-of-home advertising services. BCE Inc. was founded in 1880 and is headquartered in Verdun, Canada.

About Deutsche Telekom

Deutsche Telekom AG, together with its subsidiaries, provides integrated telecommunication services. The company operates through Germany, United States, Europe, Systems Solutions, Group Development, and Group Headquarters and Group Services segments. It offers fixed-network services, including voice and data communication services based on fixed-network and broadband technology; and sells terminal equipment and other hardware products, as well as services to resellers. In addition, the company provides mobile voice and data services to consumers and business customers; sells mobile devices and other hardware products; and sells mobile services to resellers and to companies that purchases and markets network services to third parties, such as mobile virtual network operators. Further, it offers internet services; internet-based TV products and services; and information and communication technology systems for multinational corporations and public sector institutions with an infrastructure of data centers and network services. Additionally, the company provides wireless communications services; and cloud services, digital solutions, security, and advisory solutions. Deutsche Telekom AG has mobile customers and broadband customers, as well as fixed-network lines. The company was incorporated in 1995 and is headquartered in Bonn, Germany.