Financial Comparison: NTT (OTCMKTS:NTTYY) vs. TELUS (NYSE:TU)

NTT (OTCMKTS:NTTYY) and TELUS (NYSE:TU) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.

Insider & Institutional Ownership

0.1% of NTT shares are owned by institutional investors. Comparatively, 49.4% of TELUS shares are owned by institutional investors. 0.1% of TELUS shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

NTT has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500. Comparatively, TELUS has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Dividends

NTT pays an annual dividend of $0.77 per share and has a dividend yield of 3.0%. TELUS pays an annual dividend of $1.21 per share and has a dividend yield of 7.3%. NTT pays out 39.3% of its earnings in the form of a dividend. TELUS pays out 212.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TELUS has raised its dividend for 5 consecutive years. TELUS is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations for NTT and TELUS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NTT	0	1	0	0	2.00
TELUS	0	7	1	0	2.13

TELUS has a consensus price target of $21.50, suggesting a potential upside of 30.53%. Given TELUS’s stronger consensus rating and higher probable upside, analysts clearly believe TELUS is more favorable than NTT.

Valuation and Earnings

This table compares NTT and TELUS”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NTT	$90.00 billion	N/A	$6.60 billion	$1.96	13.15
TELUS	$20.29 billion	1.24	$724.69 million	$0.57	28.90

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

Profitability

This table compares NTT and TELUS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NTT	7.30%	8.93%	3.34%
TELUS	5.78%	9.11%	2.67%

Summary

TELUS beats NTT on 10 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 TELUS

TELUS Corporation, together with its subsidiaries, provides a range of telecommunications and information technology products and services in Canada. It operates through Technology Solutions and Digitally-Led Customer Experiences segments. The Technology Solutions segment offers a range of telecommunications products and services; network services; healthcare services; mobile technologies equipment; data services, such as internet protocol; television; hosting, managed information technology, and cloud-based services; software, data management, and data analytics-driven smart food-chain and consumer goods technologies; home and business security; healthcare software and technology solutions; and voice and other telecommunications services, as well as mobile and fixed voice and data telecommunications services and products. The Digitally-Led Customer Experiences segment provides digital customer experience and digital-enablement transformation solutions, including artificial intelligence and content management solutions. The company was formerly known as TELUS Communications Inc. and changed its name to TELUS Corporation in February 2005. TELUS Corporation was incorporated in 1998 and is based in Vancouver, Canada.