Analyzing Koninklijke KPN (KKPNY) & Telecom Argentina (TEO)

Koninklijke KPN (OTCMKTS: KKPNY) and Telecom Argentina (NYSE:TEO) are both utilities 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.

Risk and Volatility

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Koninklijke KPN has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Telecom Argentina has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Profitability

This table compares Koninklijke KPN and Telecom Argentina’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Koninklijke KPN N/A N/A N/A
Telecom Argentina 11.73% 31.84% 13.98%

Institutional and Insider Ownership

0.1% of Koninklijke KPN shares are owned by institutional investors. Comparatively, 8.2% of Telecom Argentina shares are owned by institutional investors. 1.0% of Telecom Argentina 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Koninklijke KPN and Telecom Argentina, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Koninklijke KPN 0 1 1 0 2.50
Telecom Argentina 1 1 2 0 2.25

Telecom Argentina has a consensus price target of $34.67, indicating a potential upside of 8.88%. Given Telecom Argentina’s higher possible upside, analysts plainly believe Telecom Argentina is more favorable than Koninklijke KPN.

Earnings & Valuation

This table compares Koninklijke KPN and Telecom Argentina’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Koninklijke KPN $7.53 billion 1.66 $877.53 million N/A N/A
Telecom Argentina $3.95 billion 1.56 $460.85 million $2.28 13.96

Koninklijke KPN has higher revenue and earnings than Telecom Argentina.

Dividends

Koninklijke KPN pays an annual dividend of $0.11 per share and has a dividend yield of 3.8%. Telecom Argentina pays an annual dividend of $3.43 per share and has a dividend yield of 10.8%. Telecom Argentina pays out 150.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telecom Argentina has raised its dividend for 2 consecutive years. Telecom Argentina is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Telecom Argentina beats Koninklijke KPN on 10 of the 15 factors compared between the two stocks.

About Koninklijke KPN

Koninklijke KPN N.V. (KPN) is telecommunications and information and communications technology (ICT) provider in the Netherlands. The Company is engaged in offering fixed and mobile telephony, fixed and mobile broadband Internet and television to retail consumers. The Company’s segments include Consumer; Business; Network, Operations & IT; Wholesale, and iBasis. The Company is engaged in offering infrastructure and network related ICT solutions to business customers, including other telecommunications operators. KPN also provides wholesale network services to third parties and operates an Internet protocol (IP)-based infrastructure for international wholesale customers through its subsidiary, iBasis. The Company’s brands include KPN, Telfort, XS4ALL, Simyo, Yes Telecom, Ortel and iBasis. iBasis offers a portfolio of voice termination and data services for fixed and mobile operators, as well as voice-over-broadband.

About Telecom Argentina

Telecom Argentina S.A. provides fixed-line telecommunications services in Argentina, and also provides other telephone-related services, such as international long-distance service, data transmission, information technology solutions outsourcing and Internet services. The Company’s segments include Fixed Telecommunications Services (Fixed Services), Personal Mobile Telecommunications Services (Personal Mobile Services) and Nucleo Mobile Telecommunications Services (Nucleo Mobile Services). The Company, through its subsidiaries, also provides mobile telecommunications services and international wholesale services. The Fixed services segment consists of basic telephone services, interconnection services, data transmission and Internet services, information and communication technology services, and other telephone services. The Company, through its subsidiaries, such as Telecom Personal S.A. and Nucleo S.A., provides mobile services in Argentina and Paraguay, respectively.

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