Telephone and Data Systems (NYSE:TDS – Get Free Report) and AST SpaceMobile (NASDAQ:ASTS – Get Free Report) are both communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.
Risk and Volatility
Telephone and Data Systems has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, AST SpaceMobile has a beta of 2.76, indicating that its stock price is 176% more volatile than the S&P 500.
Valuation and Earnings
This table compares Telephone and Data Systems and AST SpaceMobile”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Telephone and Data Systems | $1.23 billion | 3.29 | -$6.24 million | $3.00 | 11.70 |
| AST SpaceMobile | $70.92 million | 389.50 | -$341.94 million | ($2.14) | -33.17 |
Telephone and Data Systems has higher revenue and earnings than AST SpaceMobile. AST SpaceMobile is trading at a lower price-to-earnings ratio than Telephone and Data Systems, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
80.0% of Telephone and Data Systems shares are owned by institutional investors. Comparatively, 61.0% of AST SpaceMobile shares are owned by institutional investors. 14.2% of Telephone and Data Systems shares are owned by insiders. Comparatively, 20.9% of AST SpaceMobile shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent recommendations for Telephone and Data Systems and AST SpaceMobile, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Telephone and Data Systems | 0 | 2 | 1 | 1 | 2.75 |
| AST SpaceMobile | 2 | 6 | 4 | 0 | 2.17 |
Telephone and Data Systems presently has a consensus target price of $47.00, suggesting a potential upside of 33.87%. AST SpaceMobile has a consensus target price of $85.98, suggesting a potential upside of 21.13%. Given Telephone and Data Systems’ stronger consensus rating and higher probable upside, equities analysts clearly believe Telephone and Data Systems is more favorable than AST SpaceMobile.
Profitability
This table compares Telephone and Data Systems and AST SpaceMobile’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Telephone and Data Systems | 33.20% | 11.97% | 6.04% |
| AST SpaceMobile | -536.66% | -22.88% | -10.67% |
Summary
Telephone and Data Systems beats AST SpaceMobile on 11 of the 15 factors compared between the two stocks.
About Telephone and Data Systems
Telephone and Data Systems, Inc., a telecommunications company, provides communications services in the United States. It operates through two segments: UScellular and TDS Telecom. The company offers wireless solutions to consumers, and business and government customers, including a suite of connected Internet of things (IoT) solutions, and software applications for monitor and control, business automation/operations, communication, fleet and asset management, smart water solutions, private cellular networks and custom, and end-to-end IoT solutions; wireless priority services and quality priority and preemption options; smartphones and other handsets, tablets, wearables, mobile hotspots, fixed wireless home internet, and IoT devices; and accessories, such as cases, screen protectors, chargers, and memory cards, as well as consumer electronics, including audio, home automation and networking products. It also provides replace and repair services; Trade-In program through which it buys customers' used equipment; internet connections and all-home Wi-Fi services; TDS TV+, an integrated cloud television platform that offers video content and features; local and long-distance telephone service, voice over internet protocol, and enhanced services; broadband, IP-based services, and hosted voice and video collaboration services; and communication services in underserved areas. The company sells its products through retail stores, direct and indirect sales, third-party retailers, and independent agents, as well as through ecommerce and telesales. Telephone and Data Systems, Inc. was incorporated in 1968 and is headquartered in Chicago, Illinois.
About AST SpaceMobile
AST SpaceMobile, Inc., together with its subsidiaries, develops and provides access to a space-based cellular broadband network for smartphones in the United States. Its SpaceMobile service provides cellular broadband services to end-users who are out of terrestrial cellular coverage. The company was founded in 2017 and is headquartered in Midland, Texas.
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