AT&T (NYSE:T) and Swisscom (OTCMKTS:SCMWY) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.
Earnings and Valuation
This table compares AT&T and Swisscom’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|AT&T||$170.76 billion||1.12||$19.37 billion||$3.52||8.83|
|Swisscom||$11.98 billion||2.01||$1.56 billion||$3.01||15.46|
Insider and Institutional Ownership
64.6% of AT&T shares are owned by institutional investors. Comparatively, 0.1% of Swisscom shares are owned by institutional investors. 0.1% of AT&T shares are owned by company insiders. Comparatively, 1.0% of Swisscom 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.
This is a summary of current recommendations and price targets for AT&T and Swisscom, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AT&T currently has a consensus target price of $36.39, suggesting a potential upside of 17.06%. Given AT&T’s stronger consensus rating and higher possible upside, equities analysts clearly believe AT&T is more favorable than Swisscom.
AT&T pays an annual dividend of $2.04 per share and has a dividend yield of 6.6%. Swisscom pays an annual dividend of $1.83 per share and has a dividend yield of 3.9%. AT&T pays out 58.0% of its earnings in the form of a dividend. Swisscom pays out 60.8% 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. AT&T has increased its dividend for 34 consecutive years. AT&T is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares AT&T and Swisscom’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
AT&T has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Swisscom has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.
AT&T beats Swisscom on 11 of the 17 factors compared between the two stocks.
AT&T Inc. provides telecommunication, media, and technology services worldwide. The company operates through four segments: Communications, WarnerMedia, Latin America, and Xandr. The Communications segment provides wireless and wireline telecom, video, and broadband and Internet services; video entertainment services using satellite, IP-based, and streaming options; and audio programming services under the AT&T, Cricket, AT&T PREPAID, and DIRECTV brands to residential and business customers. This segment also sells handsets, wirelessly enabled computers, and wireless data cards manufactured by various suppliers for use with company's voice and data services, as well as various accessories, such as carrying cases and hands-free devices through the company-owned stores, agents, and third-party retail stores. The WarnerMedia segment primarily produces, distributes, and licenses television programming and feature films; distributes home entertainment products in physical and digital formats; and produces and distributes mobile and console games, and consumer products, as well as offers brand licensing services. It also operates cable networks, multichannel premium pay television, and over-the-top services; and digital media properties. The Latin America segment offers video entertainment and audio programming services under the DIRECTV and SKY brands primarily to residential customers; pay-TV services, including HD sports video content; and postpaid and prepaid wireless services under the AT&T and Unefon brands, as well as sells various handsets through company-owned stores, agents, and third-party retail stores. The Xandr segment provides digital advertising services. The company was formerly known as SBC Communications Inc. and changed its name to AT&T Inc. in November 2005. AT&T Inc. was founded in 1983 and is based in Dallas, Texas.
Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally. The company operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. It offers broadband, TV, fixed-network, and mobile phone subscription services, as well as national and international telephone, and data traffic services for residential customers, and small and medium-sized enterprises. The company also provides cloud, outsourcing, workplace, UCC, mobile phone, networking, business process optimization, SAP, and security and authentication solutions, as well as a range of services to the banking industry; Internet of Things solutions; digitization services to the healthcare sector; IT systems for health insurance companies; fixed and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products. In addition, it plans, operates, and maintains network infrastructure and IT systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband services, such as voice, data, and TV services, as well as video-on-demand for residential and corporate customers. Further, the company provides mobile phone services; IT and network services, and customized solutions; and online and telephone directories, as well as sells merchandise products. Additionally, it offers collection services for radio and TV license fees; and cross-platform retail media and security communication services, as well as constructs and maintains wired and wireless networks. Swisscom AG was founded in 1998 and is headquartered in Bern, Switzerland.
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