Deutsche Telekom (OTCMKTS:DTEGY – Get Free Report) and Iridium Communications (NASDAQ:IRDM – Get Free Report) are both communication services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Volatility & Risk
Deutsche Telekom has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500. Comparatively, Iridium Communications has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.
Institutional and Insider Ownership
84.4% of Iridium Communications shares are held by institutional investors. 2.7% of Iridium Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Dividends
Deutsche Telekom pays an annual dividend of $1.88 per share and has a dividend yield of 6.4%. Iridium Communications pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. Deutsche Telekom pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Iridium Communications pays out 39.7% of its earnings in the form of a dividend. Iridium Communications has raised its dividend for 1 consecutive years.
Valuation and Earnings
This table compares Deutsche Telekom and Iridium Communications”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Deutsche Telekom | $134.70 billion | 1.04 | $10.87 billion | $2.16 | 13.50 |
| Iridium Communications | $871.66 million | 5.74 | $114.37 million | $1.51 | 31.21 |
Deutsche Telekom has higher revenue and earnings than Iridium Communications. Deutsche Telekom is trading at a lower price-to-earnings ratio than Iridium Communications, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Deutsche Telekom and Iridium Communications, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Deutsche Telekom | 0 | 4 | 2 | 0 | 2.33 |
| Iridium Communications | 1 | 4 | 3 | 0 | 2.25 |
Iridium Communications has a consensus target price of $41.20, indicating a potential downside of 12.58%. Given Iridium Communications’ higher possible upside, analysts plainly believe Iridium Communications is more favorable than Deutsche Telekom.
Profitability
This table compares Deutsche Telekom and Iridium Communications’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Deutsche Telekom | 7.32% | 11.58% | 3.61% |
| Iridium Communications | 18.06% | 22.04% | 4.08% |
Summary
Iridium Communications beats Deutsche Telekom on 12 of the 17 factors compared between the two stocks.
About Deutsche Telekom
Deutsche Telekom is a telecommunications and technology company headquartered in Bonn, Germany. Established in 1995 following the privatization of Germany’s state-owned postal and telecommunications services, it provides mobile and fixed-line communications, broadband internet, television, and digital services. The company serves consumers and businesses in Germany and other European markets, and has a major presence in the United States through T-Mobile US. Its offerings include mobile voice and data plans, fiber and other fixed-network connections, and information technology and communications solutions for business customers.
About Iridium Communications
Iridium Communications provides satellite voice and data services through a low Earth orbit constellation designed to deliver coverage across the globe, including polar regions and remote areas beyond the reach of many terrestrial networks. Its customers include businesses, government agencies, and individuals working on land, at sea, and in the air. The company offers satellite phones, voice and broadband connectivity, push-to-talk communications, and Internet of Things services. Its Iridium Certus platform supports voice and data applications, while its network also carries safety and operational communications for sectors such as maritime, aviation, and government.
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