China Mobile (CHL) and NTT Docomo (DCM) Head-To-Head Comparison

NTT Docomo (NYSE: DCM) and China Mobile (NYSE:CHL) are both large-cap telecommunications services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Institutional and Insider Ownership

0.5% of NTT Docomo shares are held by institutional investors. Comparatively, 2.0% of China Mobile shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares NTT Docomo and China Mobile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NTT Docomo 13.57% 10.97% 8.30%
China Mobile N/A N/A N/A

Volatility & Risk

NTT Docomo has a beta of 0.11, meaning that its stock price is 89% less volatile than the S&P 500. Comparatively, China Mobile has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Dividends

NTT Docomo pays an annual dividend of $0.75 per share and has a dividend yield of 3.1%. China Mobile pays an annual dividend of $1.65 per share and has a dividend yield of 3.3%. NTT Docomo pays out 50.7% of its earnings in the form of a dividend. China Mobile pays out 39.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. China Mobile is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NTT Docomo 1 3 0 0 1.75
China Mobile 1 0 2 0 2.33

Earnings & Valuation

This table compares NTT Docomo and China Mobile’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NTT Docomo $42.41 billion 2.25 $6.07 billion $1.48 16.30
China Mobile $106.68 billion 1.91 $16.37 billion $4.16 11.99

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

Summary

China Mobile beats NTT Docomo on 9 of the 14 factors compared between the two stocks.

About NTT Docomo

NTT DOCOMO, INC. (DOCOMO) is a mobile telecommunications carrier. The Company operates through three segments: telecommunications business, smart life business and other businesses. The telecommunications business segment includes mobile phone services (long-term evolution (LTE) (Xi) services and freedom of mobile multimedia access (FOMA) services), optical-fiber broadband service, satellite mobile communications services, international services and equipment sales related to these services. The smart life business segment includes video and music distribution, electronic books and other services offered through its dmarket portal, as well as finance/payment services, shopping services and various other services to support the Company’s customers’ daily lives. Its other businesses segment primarily includes Mobile Device Protection Service, as well as the development, sale and maintenance of information technology (IT) systems.

About China Mobile

China Mobile Limited is an investment holding company principally engaged in telecommunication and related businesses. Its main businesses include Mobile businesses, Wireline Broadband businesses and Internet of Things (IoT) businesses. Mobile businesses include two categories of services. Voice services include local calls, domestic and international long distance calls, roaming services and voice value-added services. Data services include short message services and multimedia message services, wireless data traffic services and application and information services, such as Mobile Music, Mobile Reading and Mobile Video, among others. Wireline Broadband businesses include the provision of wireline broadband and related services. The Company also provides customer services, including phone bill enquiry, among others. The Company mainly operates businesses in Mainland China.

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