Contrasting Freenet (OTCMKTS:FRTAF) and TIM (NYSE:TIMB)

TIM (NYSE:TIMB) and Freenet (OTCMKTS:FRTAF) are both mid-cap communication services companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TIM	15.73%	17.99%	7.74%
Freenet	10.04%	17.88%	7.85%

Earnings and Valuation

This table compares TIM and Freenet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TIM	$4.77 billion	1.87	$772.28 million	$1.69	10.87
Freenet	$2.76 billion	1.16	$306.95 million	$2.56	10.55

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

Analyst Ratings

This is a breakdown of current ratings and price targets for TIM and Freenet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TIM	1	9	2	1	2.23
Freenet	0	2	1	1	2.75

TIM presently has a consensus target price of $24.82, indicating a potential upside of 35.09%. Given TIM’s higher probable upside, research analysts plainly believe TIM is more favorable than Freenet.

Volatility & Risk

TIM has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, Freenet has a beta of -0.01, indicating that its stock price is 101% less volatile than the S&P 500.

Summary

TIM beats Freenet on 9 of the 12 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 Freenet

freenet AG provides telecommunications, broadcasting, and multimedia services for mobile communications/mobile internet, and digital lifestyle sectors in Germany. It operates through Mobile Communications, TV and Media, and Other/Holding segments. The Mobile Communications segment engages in the marketing of mobile communications services, which include voice and data services from the mobile network operators; planning, set up, installation, and maintenance services for WiFi networks; and selling and distribution of mobile devices, as well as offers additional services for mobile data communications and digital lifestyle. This segment also provides network-independent services and tariffs; tariffs of the network operators on the basis of the network operator contracts; and freenet Internet, an app-based Internet product. The TV and Media segment is involved in the planning, project management, construction, operation, service, and marketing services for broadcast-related solutions for business clients in the broadcasting and media sectors; and the provision of services to end users in the field of DVB-T2 and IPTV. The Other/Holding segment offers portal services, such as e-commerce/advertising services; payment services; various digital products and entertainment formats for downloading and displaying, as well as use on mobile devices; communication development solutions, IT services, and other services; narrowband voice services; data services; and distribution services. The company provides its services under the klarmobil.de, freenetmobile.de, Dr.SIM, freenet MOBILE, FUNK, freenet FLEX, freenet, freenet TV, waipu.tv, freenet VIDEO, freenet.de, freenet BASICS, freenet ENERGY, freenet BUSINESS, CARMADA, MEDIA BROADCAST, vitrado.de, and The Cloud brands. It sells its products through electronics stores, as well as online sales. freenet AG was incorporated in 2005 and is headquartered in Büdelsdorf, Germany.