Financial Comparison: Millicom International Cellular (NASDAQ:TIGO) versus KT (NYSE:KT)

Millicom International Cellular (NASDAQ:TIGO) and KT (NYSE:KT) 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, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Valuation and Earnings

This table compares Millicom International Cellular and KT”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Millicom International Cellular	$5.82 billion	2.42	$1.32 billion	$3.96	21.02
KT	$19.88 billion	0.46	$1.20 billion	$1.86	10.19

Millicom International Cellular has higher earnings, but lower revenue than KT. KT 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 Millicom International Cellular and KT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Millicom International Cellular	9.19%	18.39%	3.12%
KT	4.72%	6.45%	2.93%

Dividends

Millicom International Cellular pays an annual dividend of $3.00 per share and has a dividend yield of 3.6%. KT pays an annual dividend of $1.04 per share and has a dividend yield of 5.5%. 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. KT pays out 55.9% of its earnings in the form of a dividend. KT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

18.9% of KT shares are owned by institutional investors. 0.5% of Millicom International Cellular shares are owned by insiders. Comparatively, 1.0% of KT shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Millicom International Cellular and KT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Millicom International Cellular	1	3	3	0	2.29
KT	0	2	1	0	2.33

Millicom International Cellular presently has a consensus target price of $85.68, suggesting a potential upside of 2.94%. KT has a consensus target price of $23.08, suggesting a potential upside of 21.83%. Given KT’s stronger consensus rating and higher probable upside, analysts clearly believe KT is more favorable than Millicom International Cellular.

Volatility and Risk

Millicom International Cellular has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, KT has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Summary

Millicom International Cellular beats KT on 9 of the 16 factors compared between the two stocks.

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.

About KT

KT Corporation provides integrated telecommunications and platform services in Korea and internationally. The company offers mobile voice and data telecommunications services based on 5G, 4G LTE and 3G W-CDMA technology; fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services; broadband Internet access service and other Internet-related services; and data communication services, such as fixed-line and leased line services, as well as broadband Internet connection services. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and web comics and novels services; and credit card processing and other financial services. In addition, the company offers information technology and network services, and satellite services; sells handsets and miscellaneous telecommunications equipment; develops and sells residential units and commercial real estate; and rents real estate properties. Further, it maintains public telephones; offers security, B2C and B2B, investment fund, software development and data processing, value added network, call center, system integration and maintenance, marketing, PCS distribution, truck transportation and trucking arrangement business, cloud system implementation, satellite communication network, installation and management, and data center development and related services. Additionally, the company is involved in the Internet banking ASP and security solutions, residential building development and supply, sports team management, technology business finance, and submarine cable construction and maintenance businesses. The company was formerly known as Korea Telecom Corp. and changed its name to KT Corporation in March 2002. KT Corporation was founded in 1981 and is headquartered in Seongnam-si, South Korea.