Verizon Communications (NYSE:VZ) and China Mobile (NYSE:CHL) are both large-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.
Valuation & Earnings
This table compares Verizon Communications and China Mobile's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Verizon Communications | $131.87 billion | 1.73 | $19.27 billion | $4.81 | 11.48 |
China Mobile | $107.14 billion | 1.05 | $15.43 billion | $3.72 | 7.40 |
Verizon Communications has higher revenue and earnings than China Mobile. China Mobile is trading at a lower price-to-earnings ratio than Verizon Communications, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Verizon Communications and China Mobile's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Verizon Communications | 14.76% | 32.15% | 6.87% |
China Mobile | N/A | N/A | N/A |
Institutional & Insider Ownership
64.9% of Verizon Communications shares are held by institutional investors. Comparatively, 1.9% of China Mobile shares are held by institutional investors. 0.1% of Verizon Communications shares are held 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.
Dividends
Verizon Communications pays an annual dividend of $2.51 per share and has a dividend yield of 4.5%. China Mobile pays an annual dividend of $1.78 per share and has a dividend yield of 6.5%. Verizon Communications pays out 52.2% of its earnings in the form of a dividend. China Mobile pays out 47.8% 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. Verizon Communications has increased its dividend for 13 consecutive years. China Mobile is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Verizon Communications has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, China Mobile has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and target prices for Verizon Communications and China Mobile, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Verizon Communications | 0 | 13 | 6 | 1 | 2.40 |
China Mobile | 1 | 0 | 2 | 0 | 2.33 |
Verizon Communications currently has a consensus target price of $61.8421, indicating a potential upside of 11.95%. China Mobile has a consensus target price of $49.00, indicating a potential upside of 78.12%. Given China Mobile's higher probable upside, analysts clearly believe China Mobile is more favorable than Verizon Communications.
Summary
Verizon Communications beats China Mobile on 14 of the 18 factors compared between the two stocks.