Critical Analysis: GTT Communications (NYSE:GTT) versus China Mobile (NYSE:CHL)

GTT Communications (NYSE:GTT) and China Mobile (NYSE:CHL) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Insider & Institutional Ownership

68.0% of GTT Communications shares are owned by institutional investors. Comparatively, 2.0% of China Mobile shares are owned by institutional investors. 46.4% of GTT Communications shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

GTT Communications has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, China Mobile has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Valuation and Earnings

This table compares GTT Communications and China Mobile’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GTT Communications $1.73 billion 0.22 -$105.90 million ($0.68) -9.31
China Mobile $107.14 billion 1.30 $15.43 billion $3.72 9.16

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

Profitability

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

Net Margins Return on Equity Return on Assets
GTT Communications -9.51% -27.24% -1.59%
China Mobile N/A N/A N/A

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GTT Communications 1 3 1 0 2.00
China Mobile 1 0 2 0 2.33

GTT Communications currently has a consensus target price of $11.00, suggesting a potential upside of 73.78%. China Mobile has a consensus target price of $49.00, suggesting a potential upside of 43.86%. Given GTT Communications’ higher probable upside, research analysts plainly believe GTT Communications is more favorable than China Mobile.

Summary

China Mobile beats GTT Communications on 10 of the 14 factors compared between the two stocks.

GTT Communications Company Profile

GTT Communications, Inc. provides cloud networking services to multinational enterprises, carriers, and government customers in the United States, Europe, and internationally. The company offers private, public, and hybrid cloud network solutions; high bandwidth-Internet connectivity and IP transit, as well as broadband and wireless Internet access services; managed equipment, security, and hosting services; and voice services consisting of session initiation protocol trunking and hosted private branch exchange services. It also provides transport and infrastructure services enabling cloud-based applications and the transport of high volume data between data centers, enterprise office locations, and media hubs; video transport services to support broadcast quality transmission of live events, sports entertainment, and news to media and entertainment industry; wavelength services to deliver scalable high-performance optical connectivity; Ethernet services that enable to design network equipment; and colocation, turnkey, duct, and dark fiber services. The company's IP network consists of approximately 600 points of presence. GTT Communications, Inc. markets its products and services through a network of direct sales force and indirect sales channels. The company was formerly known as Global Telecom & Technology, Inc. and changed its name to GTT Communications, Inc. in January 2014. GTT Communications, Inc. was founded in 2005 and is headquartered in McLean, Virginia.

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.

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