KDDI (OTCMKTS:KDDIY) versus TIM (NYSE:TIMB) Critical Comparison

TIM (NYSE:TIMB) and KDDI (OTCMKTS:KDDIY) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Risk & Volatility

TIM has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, KDDI has a beta of 0.06, indicating that its stock price is 94% less volatile than the S&P 500.

Valuation & Earnings

This table compares TIM and KDDI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TIM	$4.72 billion	2.11	$584.73 million	$1.29	15.91
KDDI	$38.86 billion	1.64	$4.53 billion	$1.01	15.11

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

Insider and Institutional Ownership

0.1% of KDDI shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

TIM pays an annual dividend of $0.93 per share and has a dividend yield of 4.5%. KDDI pays an annual dividend of $0.35 per share and has a dividend yield of 2.3%. TIM pays out 72.1% of its earnings in the form of a dividend. KDDI pays out 34.7% 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for TIM and KDDI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TIM	0	6	3	0	2.33
KDDI	0	1	0	0	2.00

TIM presently has a consensus price target of $21.50, indicating a potential upside of 4.72%. Given TIM’s stronger consensus rating and higher possible upside, equities analysts clearly believe TIM is more favorable than KDDI.

Profitability

This table compares TIM and KDDI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TIM	13.91%	13.99%	6.37%
KDDI	N/A	N/A	N/A

Summary

TIM beats KDDI on 11 of the 15 factors compared between the two stocks.

About TIM

TIM S.A., a telecommunications company, provides mobile voice, data, and broadband services in Brazil. The company offers in mobile, landline, long-distance, and data transmission services. It also offers fixed ultra-broadband, fixed ultraband broadband, and digital content services. The company serves individuals and corporates, as well as small, medium, and large companies. TIM S.A is based in Rio de Janeiro, Brazil. The company operates as a subsidiary of TIM Brasil Serviços e Participações S.A.

About KDDI

KDDI Corporation provides telecommunications services in Japan and internationally. It operates in two segments, Personal Services and Business Services. The Personal Services segment offers telecommunication services and other services such as finance, energy, and LX through its multi-brands au, UQ mobile, and povo. The Business Services segment offers smartphones and other devices, network and cloud services, and data center services to corporate customers under the TELEHOUSE brand. The company was incorporated in 1984 and is headquartered in Tokyo, Japan.