KT (NYSE:KT – Get Free Report) and Deutsche Telekom (OTCMKTS:DTEGY – Get Free Report) are both communication services companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.
Risk and Volatility
KT has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Deutsche Telekom has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.
Profitability
This table compares KT and Deutsche Telekom’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| KT | 5.51% | 8.04% | 3.63% |
| Deutsche Telekom | 7.18% | 11.11% | 3.52% |
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| KT | $28,186.52 billion | 0.00 | $1.20 billion | $2.26 | 8.10 |
| Deutsche Telekom | $134.70 billion | 1.18 | $10.87 billion | $2.07 | 15.67 |
Deutsche Telekom has lower revenue, but higher earnings than KT. KT is trading at a lower price-to-earnings ratio than Deutsche Telekom, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
18.9% of KT shares are owned by institutional investors. 1.0% of KT shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for KT and Deutsche Telekom, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| KT | 0 | 3 | 0 | 0 | 2.00 |
| Deutsche Telekom | 0 | 2 | 2 | 0 | 2.50 |
KT currently has a consensus price target of $23.08, suggesting a potential upside of 26.02%. Given KT’s higher probable upside, equities research analysts clearly believe KT is more favorable than Deutsche Telekom.
About KT
KT Corporation provides integrated telecommunications and platform services in Korea and internationally. The company offers mobile voice and data telecommunications services based on 5G, 4G LTE and 3G W-CDMA technology; fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services; broadband Internet access service and other Internet-related services; and data communication services, such as fixed-line and leased line services, as well as broadband Internet connection services. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and web comics and novels services; and credit card processing and other financial services. In addition, the company offers information technology and network services, and satellite services; sells handsets and miscellaneous telecommunications equipment; develops and sells residential units and commercial real estate; and rents real estate properties. Further, it maintains public telephones; offers security, B2C and B2B, investment fund, software development and data processing, value added network, call center, system integration and maintenance, marketing, PCS distribution, truck transportation and trucking arrangement business, cloud system implementation, satellite communication network, installation and management, and data center development and related services. Additionally, the company is involved in the Internet banking ASP and security solutions, residential building development and supply, sports team management, technology business finance, and submarine cable construction and maintenance businesses. The company was formerly known as Korea Telecom Corp. and changed its name to KT Corporation in March 2002. KT Corporation was founded in 1981 and is headquartered in Seongnam-si, South Korea.
About Deutsche Telekom
Deutsche Telekom AG, together with its subsidiaries, provides integrated telecommunication services. The company operates through Germany, United States, Europe, Systems Solutions, Group Development, and Group Headquarters and Group Services segments. It offers fixed-network services, including voice and data communication services based on fixed-network and broadband technology; and sells terminal equipment and other hardware products, as well as services to resellers. In addition, the company provides mobile voice and data services to consumers and business customers; sells mobile devices and other hardware products; and sells mobile services to resellers and to companies that purchases and markets network services to third parties, such as mobile virtual network operators. Further, it offers internet services; internet-based TV products and services; and information and communication technology systems for multinational corporations and public sector institutions with an infrastructure of data centers and network services. Additionally, the company provides wireless communications services; and cloud services, digital solutions, security, and advisory solutions. Deutsche Telekom AG has mobile customers and broadband customers, as well as fixed-network lines. The company was incorporated in 1995 and is headquartered in Bonn, Germany.
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