NTT DOCOMO (NYSE: DCM) and SK Telecom Co. (NYSE:SKM) are both large-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.
Earnings and Valuation
This table compares NTT DOCOMO and SK Telecom Co.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NTT DOCOMO||$42.18 billion||2.00||$12.78 billion||$1.58||14.44|
|SK Telecom Co.||$15.37 billion||0.99||$4.08 billion||$2.80||8.42|
NTT DOCOMO has higher revenue and earnings than SK Telecom Co.. SK Telecom Co. is trading at a lower price-to-earnings ratio than NTT DOCOMO, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
NTT DOCOMO has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500. Comparatively, SK Telecom Co. has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500.
This table compares NTT DOCOMO and SK Telecom Co.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SK Telecom Co.||11.62%||12.85%||6.86%|
This is a summary of current ratings and recommmendations for NTT DOCOMO and SK Telecom Co., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SK Telecom Co.||0||3||1||0||2.25|
Institutional and Insider Ownership
0.5% of NTT DOCOMO shares are held by institutional investors. Comparatively, 11.9% of SK Telecom Co. shares are held by institutional investors. 1.0% of SK Telecom Co. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
NTT DOCOMO pays an annual dividend of $0.68 per share and has a dividend yield of 3.0%. SK Telecom Co. pays an annual dividend of $0.72 per share and has a dividend yield of 3.1%. NTT DOCOMO pays out 43.0% of its earnings in the form of a dividend. SK Telecom Co. pays out 25.7% 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. SK Telecom Co. is clearly the better dividend stock, given its higher yield and lower payout ratio.
SK Telecom Co. beats NTT DOCOMO on 7 of the 13 factors compared between the two stocks.
About NTT DOCOMO
NTT DOCOMO, INC. (DOCOMO) is a mobile telecommunications carrier. The Company operates through three segments: telecommunications business, smart life business and other businesses. The telecommunications business segment includes mobile phone services (long-term evolution (LTE) (Xi) services and freedom of mobile multimedia access (FOMA) services), optical-fiber broadband service, satellite mobile communications services, international services and equipment sales related to these services. The smart life business segment includes video and music distribution, electronic books and other services offered through its dmarket portal, as well as finance/payment services, shopping services and various other services to support the Company’s customers’ daily lives. Its other businesses segment primarily includes Mobile Device Protection Service, as well as the development, sale and maintenance of information technology (IT) systems.
About SK Telecom Co.
SK Telecom Co., Ltd. provides wireless telecommunications in Korea. The Company is engaged in the commercial development and implementation of wireless and fixed-line technologies and services, as well as develop its platforms, including Internet of things (IoT) solutions, lifestyle enhancement and advanced media. It operates through three segments: cellular services, which include wireless voice and data transmission services, sales of wireless devices, IoT solutions platform services and lifestyle enhancement platform services; fixed-line telecommunication services, which include fixed-line telephone services, broadband Internet services, advanced media platform services (including Internet Protocol television (IPTV)) and business communications services, and other businesses, which include its commerce business, its hardware business and other operations. Its brands include SK Telecom, T-Roaming, 7Mobile, B phone, 00700, B tv, Syrup, UO Smart Beam Laser, Astell&Kern and Nate.
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