TIM (NYSE:TIMB) and Lumen Technologies (NYSE:LUMN) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Valuation & Earnings
This table compares TIM and Lumen Technologies' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| TIM | $4.22 billion | 1.31 | $917.85 million | $1.03 | 11.12 |
| Lumen Technologies | $22.40 billion | 0.60 | $-5,269,000,000.00 | $1.32 | 9.31 |
TIM has higher earnings, but lower revenue than Lumen Technologies. Lumen Technologies is trading at a lower price-to-earnings ratio than TIM, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares TIM and Lumen Technologies' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| TIM | 10.51% | 8.28% | 4.67% |
| Lumen Technologies | 6.05% | 12.10% | 2.55% |
Volatility and Risk
TIM has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Lumen Technologies has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.
Institutional and Insider Ownership
6.9% of TIM shares are held by institutional investors. Comparatively, 78.6% of Lumen Technologies shares are held by institutional investors. 0.6% of Lumen Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Dividends
TIM pays an annual dividend of $0.14 per share and has a dividend yield of 1.2%. Lumen Technologies pays an annual dividend of $1.00 per share and has a dividend yield of 8.1%. TIM pays out 13.6% of its earnings in the form of a dividend. Lumen Technologies pays out 75.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for TIM and Lumen Technologies, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| TIM | 0 | 0 | 1 | 0 | 3.00 |
| Lumen Technologies | 4 | 4 | 2 | 0 | 1.80 |
Lumen Technologies has a consensus price target of $10.2625, suggesting a potential downside of 16.50%. Given Lumen Technologies' higher possible upside, analysts plainly believe Lumen Technologies is more favorable than TIM.
Summary
Lumen Technologies beats TIM on 9 of the 16 factors compared between the two stocks.
