Telstra (OTCMKTS:TLSYY) versus Telekom Austria (OTCMKTS:TKAGY) Critical Review

Telstra (OTCMKTS:TLSYY) and Telekom Austria (OTCMKTS:TKAGY) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.

Risk & Volatility

Telstra has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Telekom Austria has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Insider and Institutional Ownership

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

Earnings & Valuation

This table compares Telstra and Telekom Austria’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telstra $17.69 billion 1.66 $2.76 billion $0.63 19.57
Telekom Austria $5.24 billion 0.93 $287.33 million $0.85 17.21

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Telstra and Telekom Austria, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telstra 0 2 1 0 2.33
Telekom Austria 0 1 0 0 2.00

Profitability

This table compares Telstra and Telekom Austria’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telstra N/A N/A N/A
Telekom Austria 6.99% 12.58% 3.95%

Dividends

Telstra pays an annual dividend of $0.50 per share and has a dividend yield of 4.1%. Telekom Austria pays an annual dividend of $0.46 per share and has a dividend yield of 3.1%. Telstra pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telekom Austria pays out 54.1% of its earnings in the form of a dividend.

Summary

Telstra beats Telekom Austria on 9 of the 14 factors compared between the two stocks.

About Telstra

Telstra Corporation Limited, together with its subsidiaries, provides telecommunications and information services to businesses, governments, communities, and individuals in Australia and internationally. It operates in four segments: Telstra Consumer and Small Business, Telstra Enterprise, Telstra Operations, and Telstra Wholesale. The company offers telecommunication products, services, and solutions across mobiles, fixed and mobile broadband, telephony and pay television/Internet protocol, and digital content; and online self-service capabilities, including buying, billing, and servicing requests, as well as operates inbound and outbound call centers, owned and licensed Telstra shops, and the Telstra dealership network. It also provides sales and contract management services for medium to large business and government customers; and product management services for advanced technology solutions and services, such as data and Internet protocol networks, and mobility applications and services, as well as network applications and services products comprising managed network, unified communications, cloud, industry solutions, and integrated services and monitoring. In addition, the company engages in the development of industry vertical solutions; planning, design, engineering architecture, and construction of Telstra networks, technology, and information technology solutions; and provision of a range of telecommunication products and services to other carriers, carriage service providers, and Internet service providers through its networks and related support systems. Further, it provides disconnection, media and marketing, and other services. The company was formerly known as Australian and Overseas Telecommunications Corporation Limited and changed its name to Telstra Corporation Limited in April 1993. Telstra Corporation Limited was founded in 1901 and is based in Melbourne, Australia.

About Telekom Austria

Telekom Austria AG, together with its subsidiaries, provides fixed-line and mobile communications services to individuals, commercial and non-commercial organizations, and other national and foreign carriers. It offers fixed-line services, including access, Internet, fixed-to-mobile calls, international traffic, voice value-added, interconnection, call center, IPTV, smart home, and television services, as well as data, and information and communication technology solutions; and mobile communications services comprise digital mobile communications services, including value-added, text and multimedia messaging, m-commerce, and music platform and information services. The company also provides terminal equipment, convergent products, wholesale services, Internet access services, digital products, cloud and Internet of Things services, and integrated business solutions, as well as mobile payment, entertainment, and broadcasting services. As of December 31, 2018, it provided mobile communication services to approximately 21.0 million customers; and had approximately 6.3 million fixed-line revenue generating units. The company has operations in Austria, Slovenia, Bulgaria, Belarus, Croatia, the Republic of Serbia, and the Republic of Macedonia. Telekom Austria AG is headquartered in Vienna, Austria. Telekom Austria AG is a subsidiary of América Móvil, S.A.B. de C.V.

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