Critical Review: Millicom International Cellular (NASDAQ:TIGO) vs. NTT (OTCMKTS:NTTYY)

NTT (OTCMKTS:NTTYY) and Millicom International Cellular (NASDAQ:TIGO) are both large-cap communication services companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Institutional & Insider Ownership

0.1% of NTT shares are held by institutional investors. 0.5% of Millicom International Cellular shares are held 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.

Dividends

NTT pays an annual dividend of $0.62 per share and has a dividend yield of 2.3%. Millicom International Cellular pays an annual dividend of $3.00 per share and has a dividend yield of 3.2%. NTT pays out 29.7% of its earnings in the form of a dividend. Millicom International Cellular pays out 75.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of recent recommendations for NTT and Millicom International Cellular, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NTT	0	2	0	0	2.00
Millicom International Cellular	1	3	3	0	2.29

Millicom International Cellular has a consensus target price of $85.68, indicating a potential downside of 9.65%. Given Millicom International Cellular’s stronger consensus rating and higher possible upside, analysts plainly believe Millicom International Cellular is more favorable than NTT.

Risk & Volatility

NTT has a beta of 0.05, suggesting that its share price is 95% less volatile than the S&P 500. Comparatively, Millicom International Cellular has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Earnings and Valuation

This table compares NTT and Millicom International Cellular”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NTT	$95.72 billion	0.94	$6.84 billion	$2.09	13.18
Millicom International Cellular	$5.82 billion	2.75	$1.32 billion	$3.96	23.95

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

Profitability

This table compares NTT and Millicom International Cellular’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NTT	7.17%	10.43%	2.45%
Millicom International Cellular	9.19%	18.39%	3.12%

Summary

Millicom International Cellular beats NTT on 12 of the 16 factors compared between the two stocks.

About NTT

Nippon Telegraph and Telephone Corporation operates as a telecommunications company in Japan and internationally. It operates through Integrated ICT Business, Regional Communications Business, Global Solutions Business, and Others segments. The Integrated ICT Business segment offers mobile phone, domestic inter-prefectural communications, international communications, solutions, and system development and related services. The Regional Communications Business segment provides intra-prefectural communications and related ancillary services. The Global Solutions Business segment offers consulting, system and software development, network system, cloud, global data center, and related services. The Others segment engages in the real estate, energy, and other businesses. The company was founded in 1952 and is headquartered in Tokyo, Japan.

About Millicom International Cellular

Millicom International Cellular S.A. provides cable and mobile services in Latin America. It offers mobile services, including mobile data and voice, and short message services; and mobile financial services, such as payments, money transfers, international remittances, savings, real-time loans, and micro-insurance. The company also operates TIGO Sports for local entertainment; Tigo Money that allows its customers to send and receive money without the need for a bank account; and TIGO ONEtv for pay TV. In addition, it provides fixed services, including broadband and fixed voice; and fixed-voice and data telecommunications services, managed services, cloud and security solutions, and value-added services; and tower infrastructure and services. The company serves small, medium, and large businesses, as well as residential consumers and governmental entities. It markets its products and services under the Tigo and Tigo Business brands. The company was founded in 1990 and is headquartered in Luxembourg.