Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) and NTT Docomo (OTCMKTS:DCMYY) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.
This is a summary of recent ratings and target prices for Telefonaktiebolaget LM Ericsson and NTT Docomo, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telefonaktiebolaget LM Ericsson||1||5||4||0||2.30|
Earnings and Valuation
This table compares Telefonaktiebolaget LM Ericsson and NTT Docomo’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Telefonaktiebolaget LM Ericsson||$24.28 billion||1.30||-$751.60 million||$0.03||314.67|
|NTT Docomo||$43.67 billion||1.98||$5.97 billion||$1.69||13.78|
NTT Docomo has higher revenue and earnings than Telefonaktiebolaget LM Ericsson. NTT Docomo is trading at a lower price-to-earnings ratio than Telefonaktiebolaget LM Ericsson, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Telefonaktiebolaget LM Ericsson has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, NTT Docomo has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500.
This table compares Telefonaktiebolaget LM Ericsson and NTT Docomo’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telefonaktiebolaget LM Ericsson||-1.46%||3.79%||1.27%|
Insider & Institutional Ownership
7.8% of Telefonaktiebolaget LM Ericsson shares are held by institutional investors. Comparatively, 0.1% of NTT Docomo shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Telefonaktiebolaget LM Ericsson pays an annual dividend of $0.07 per share and has a dividend yield of 0.7%. NTT Docomo pays an annual dividend of $0.76 per share and has a dividend yield of 3.3%. Telefonaktiebolaget LM Ericsson pays out 233.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NTT Docomo pays out 45.0% of its earnings in the form of a dividend. NTT Docomo is clearly the better dividend stock, given its higher yield and lower payout ratio.
NTT Docomo beats Telefonaktiebolaget LM Ericsson on 9 of the 14 factors compared between the two stocks.
About Telefonaktiebolaget LM Ericsson
Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for service providers. It operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment provides mobile radio access networks, transport solutions, and site solutions, as well as related services, such as network rollout, network tuning, and customer support. The Digital Services segment offers products and services for service providers in the areas of business support systems, operations support systems, cloud core, cloud communication, network functions virtualization, and cloud infrastructure, as well as consulting, learning, and testing services. The Managed Services segment provides vendor agnostic services, including networks and IT managed, application development and modernization, and network design and optimization services to manage service providers networks. The Emerging Business and Other segment consists of emerging businesses; iconectiv that offers software-based interconnection solutions; media solutions; and Red Bee Media, which consists of technology enabled services to manage the play-out platform for broadcasters and content owners. It operates in Europe and Latin America, the Middle East and Africa, North America, North East Asia, South East Asia, Oceania, and India. The company was founded in 1876 and is headquartered in Stockholm, Sweden.
About NTT Docomo
NTT DOCOMO, INC., a telecommunications company, provides various mobile services in Japan and internationally. The company offers iPhone, iPad, smartphone, tablet, and feature phone products and services under the docomo name, as well as d POINT CLUB, a point program. It also provides technical and operational services to mobile operators and other companies. In addition, the company offers LTE, FOMA, and FOMA high-speed services; docomo Wi-Fi services; VoLTE voice call services; docomo Hikari, an optical Internet service; and docomo Shop services. It serves approximately 73 million customers through advanced wireless networks, including a LTE network and LTE-advanced network. The company was founded in 1991 and is headquartered in Tokyo, Japan. NTT DOCOMO, INC. is a subsidiary of Nippon Telegraph and Telephone Corporation.
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