T-Mobile US (NASDAQ:TMUS – Get Free Report) and TIM (NYSE:TIMB – Get Free Report) are both communication services companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.
Analyst Ratings
This is a summary of recent ratings and recommmendations for T-Mobile US and TIM, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| T-Mobile US | 0 | 8 | 21 | 1 | 2.77 |
| TIM | 1 | 9 | 2 | 1 | 2.23 |
T-Mobile US currently has a consensus price target of $252.08, indicating a potential upside of 36.83%. TIM has a consensus price target of $24.82, indicating a potential upside of 39.11%. Given TIM’s higher possible upside, analysts plainly believe TIM is more favorable than T-Mobile US.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| T-Mobile US | $88.31 billion | 2.24 | $10.99 billion | $9.55 | 19.29 |
| TIM | $27.40 billion | 0.32 | $772.28 million | $1.69 | 10.56 |
T-Mobile US has higher revenue and earnings than TIM. TIM is trading at a lower price-to-earnings ratio than T-Mobile US, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
42.5% of T-Mobile US shares are owned by institutional investors. 0.3% of T-Mobile US shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
T-Mobile US has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, TIM has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.
Dividends
T-Mobile US pays an annual dividend of $4.08 per share and has a dividend yield of 2.2%. TIM pays an annual dividend of $1.03 per share and has a dividend yield of 5.8%. T-Mobile US pays out 42.7% of its earnings in the form of a dividend. TIM pays out 60.9% 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.
Profitability
This table compares T-Mobile US and TIM’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| T-Mobile US | 11.45% | 20.16% | 5.41% |
| TIM | 15.73% | 17.99% | 7.74% |
Summary
T-Mobile US beats TIM on 11 of the 16 factors compared between the two stocks.
About T-Mobile US
T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to customers in the postpaid, prepaid, and wholesale and other services. It also provides wireless devices, including smartphones, wearables, tablets, home broadband routers, and other mobile communication devices, as well as wireless devices and accessories; financing through equipment installment plans; reinsurance for device insurance policies and extended warranty contracts; leasing through JUMP! On Demand; and High Speed Internet services. In addition, the company offers services, devices, and accessories under the T-Mobile and Metro by T-Mobile brands through its owned and operated retail stores, T-Mobile app and customer care channels, and its websites. It also sells its devices to dealers and other third-party distributors for resale through independent third-party retail outlets and various third-party websites. The company was founded in 1994 and is headquartered in Bellevue, Washington.
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.
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