Analyzing China Mobile (NYSE:CHL) & Zayo Group (NYSE:ZAYO)

China Mobile (NYSE:CHL) and Zayo Group (NYSE:ZAYO) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, profitability, risk, institutional ownership and earnings.

Risk and Volatility

China Mobile has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Zayo Group has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.



Analyst Ratings

This is a summary of current recommendations and price targets for China Mobile and Zayo Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Mobile 1 5 5 0 2.36
Zayo Group 0 11 3 0 2.21

China Mobile currently has a consensus target price of $50.83, suggesting a potential upside of 18.86%. Zayo Group has a consensus target price of $34.29, suggesting a potential upside of 1.46%. Given China Mobile’s stronger consensus rating and higher probable upside, equities research analysts plainly believe China Mobile is more favorable than Zayo Group.

Valuation & Earnings

This table compares China Mobile and Zayo Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Mobile $106.54 billion 1.64 $17.80 billion $4.16 10.28
Zayo Group $2.58 billion 3.10 $150.00 million $0.62 54.52

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

Dividends

China Mobile pays an annual dividend of $1.75 per share and has a dividend yield of 4.1%. Zayo Group does not pay a dividend. China Mobile pays out 42.1% of its earnings in the form of a dividend. China Mobile has raised its dividend for 2 consecutive years.

Insider & Institutional Ownership

2.0% of China Mobile shares are owned by institutional investors. Comparatively, 88.2% of Zayo Group shares are owned by institutional investors. 4.5% of Zayo Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares China Mobile and Zayo Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Mobile N/A N/A N/A
Zayo Group 5.82% 11.27% 1.62%

China Mobile Company Profile

China Mobile Limited provides mobile telecommunications and related services in Mainland China and Hong Kong. The company offers local calls; domestic and international long distance calls and roaming services; and value-added services, such as caller identity display, call waiting, conference calls, and others. It also provides wireless Internet service, as well as digital applications comprising music, video, reading, gaming, and animation; wireline broadband services; and wireline voice services. In addition, it offers dedicated line and IDC services to corporate customers in a range of industry sectors; and basic corporate communication products comprising corporate VPMN and SMS, and tailor made solutions. Further, the company provides international telecommunications services, which includes IDD, roaming, Internet, MNC, and value added business services. Additionally, it offers telecommunications network planning, design, and consulting services; roaming clearance, IT system operation, and technology support services; technology platform development and maintenance services; mobile data, and system integration and development services; network construction and maintenance, network planning and optimizing, and training services; electronic communication products design and sale of related products; non-banking financial services; computer hardware and software research and development services; call center services; e-payment, e-commerce, and Internet finance services; and mobile Internet digital content services, as well as operates a network and business coordination center. The company serves 925 million mobile customers and 157 million wireline broadband customers. The company was formerly known as China Mobile (Hong Kong) Limited and changed its name to China Mobile Limited in May 2006. The company was incorporated in 1997 and is based in Central, Hong Kong. China Mobile Limited is a subsidiary of China Mobile Hong Kong (BVI) Limited.

Zayo Group Company Profile

Zayo Group Holdings, Inc., through its subsidiaries, provides bandwidth infrastructure solutions for the communications industry in the United States, Canada, and Europe. The company operates in six segments: Fiber Solutions, Transport, Enterprise Networks, Zayo Colocation (zColo), Allstream, and Other. The Fiber Solutions segment provides dark fiber, and fiber-to-the-tower and small cell mobile infrastructure services for carriers and other communication service providers, Internet service providers, wireless service providers, media and content companies, large enterprises, and other companies. The Transport segment offers lit bandwidth infrastructure solutions comprising wavelength, Ethernet, wholesale IP services, and SONET services through its metro, regional, and long-haul fiber networks for carriers, content providers, financial services companies, healthcare, government entities, education institutions, and other medium and large enterprises. The Enterprise Networks segment provides connectivity and telecommunications solutions comprising Internet, wide area networking products, managed products, and cloud based computing and storage offerings to medium and large enterprises. The Zayo Colocation (zColo) segment offers data center infrastructure solutions consisting of colocation space, and power and interconnection services to a range of enterprise, carrier, cloud, and content customers. The Allstream segment provides cloud VoIP and data solutions, such as voice offerings; and unified communications, as well as telecommunications services, including Ethernet, and IP/MPLS VPN solutions. The Other segment provides network and technical resources to customers in designing, acquiring, and maintaining their networks. Zayo Group Holdings, Inc. was founded in 2007 and is headquartered in Boulder, Colorado.

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