Analyzing BlackBerry (NYSE:BB) and TIM Participacoes (TSU)

BlackBerry (NYSE: BB) and TIM Participacoes (NYSE:TSU) are both mid-cap telecommunications services companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Institutional and Insider Ownership

58.5% of BlackBerry shares are owned by institutional investors. Comparatively, 15.5% of TIM Participacoes shares are owned by institutional investors. 22.7% of BlackBerry shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

BlackBerry has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, TIM Participacoes has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Dividends

TIM Participacoes pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. BlackBerry does not pay a dividend. TIM Participacoes pays out 25.4% of its earnings in the form of a dividend. TIM Participacoes has raised its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of current ratings and recommmendations for BlackBerry and TIM Participacoes, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackBerry 3 7 5 0 2.13
TIM Participacoes 0 1 6 0 2.86

BlackBerry presently has a consensus target price of $10.34, suggesting a potential downside of 24.33%. TIM Participacoes has a consensus target price of $19.50, suggesting a potential downside of 0.96%. Given TIM Participacoes’ stronger consensus rating and higher possible upside, analysts clearly believe TIM Participacoes is more favorable than BlackBerry.

Valuation & Earnings

This table compares BlackBerry and TIM Participacoes’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BlackBerry $1.31 billion 5.60 -$1.21 billion $0.66 20.71
TIM Participacoes $4.50 billion 2.12 $215.14 million $0.63 31.25

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

Profitability

This table compares BlackBerry and TIM Participacoes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackBerry 37.36% 3.70% 2.44%
TIM Participacoes 5.57% 5.71% 3.02%

Summary

TIM Participacoes beats BlackBerry on 11 of the 17 factors compared between the two stocks.

BlackBerry Company Profile

BlackBerry Limited (BlackBerry) provides mobile communications solutions. The Company is engaged in the sale of smartphones and enterprise software and services. The Company’s products and services include Enterprise Solutions and Services, Devices, BlackBerry Technology Solutions and Messaging. It is engaged in providing enterprise mobility management (EMM) and mobile security, and offers a portfolio of enterprise software solutions and services that can be deployed across a range of ecosystems and devices, including BlackBerry Enterprise Service (BES) 12 and Good Platforms, BES12 Cloud, enterprise file-sync-and-share (EFSS), SecuSUITE for Enterprise, Enhanced subscriber identity module (SIM)-Based Licensing (ESBL), WorkLife by BlackBerry solution and Professional Cybersecurity Services. The BlackBerry Technology Solutions business unit consists of five units: QNX, Certicom, Paratek, the BlackBerry IoT Platform and Intellectual Property and Patent Licensing (IPPL).

TIM Participacoes Company Profile

TIM Participacoes S.A. (TIM) is a provider of mobile telecommunication services in Brazil. The Company, through its subsidiaries in various telecommunications markets, operates mobile, fixed and long distance telephony, data transmission and ultra-broadband services. Its direct subsidiaries include TIM Celular S.A., which provides landline telephone services (commuted fixed telephonic service (STFC))-domestic long distance and international long distance voice services, personal mobile service (SMP) and multimedia communication service (multimedia service of communication (SCM)) in all Brazilian states and in the Federal District, and Intelig Telecomunicacoes Ltda., which provides STFC-local voices services and SCM services in all Brazilian states and in the Federal District. Its consumer plans include prepaid plans, post-paid plans and controle plans. It offers value-added services, including short message services or text messaging, multimedia messaging services and push-mail.

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