Critical Review: TIM Participacoes (NYSE:TSU) vs. SINGAPORE TELEC/S (NYSE:SGAPY)

TIM Participacoes (NYSE:TSU) and SINGAPORE TELEC/S (OTCMKTS:SGAPY) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Volatility & Risk

TIM Participacoes has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, SINGAPORE TELEC/S has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Earnings & Valuation

This table compares TIM Participacoes and SINGAPORE TELEC/S’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TIM Participacoes $4.43 billion 1.67 $696.34 million $1.37 11.12
SINGAPORE TELEC/S $12.79 billion 2.96 $2.28 billion N/A N/A

SINGAPORE TELEC/S has higher revenue and earnings than TIM Participacoes.

Insider & Institutional Ownership

14.8% of TIM Participacoes shares are owned by institutional investors. Comparatively, 0.1% of SINGAPORE TELEC/S shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for TIM Participacoes and SINGAPORE TELEC/S, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TIM Participacoes 0 3 3 0 2.50
SINGAPORE TELEC/S 0 0 0 0 N/A

TIM Participacoes presently has a consensus target price of $22.33, indicating a potential upside of 46.64%. Given TIM Participacoes’ higher possible upside, analysts plainly believe TIM Participacoes is more favorable than SINGAPORE TELEC/S.

Dividends

TIM Participacoes pays an annual dividend of $0.16 per share and has a dividend yield of 1.1%. SINGAPORE TELEC/S pays an annual dividend of $1.52 per share and has a dividend yield of 6.6%. TIM Participacoes pays out 11.7% of its earnings in the form of a dividend.

Profitability

This table compares TIM Participacoes and SINGAPORE TELEC/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TIM Participacoes 23.66% 12.16% 7.16%
SINGAPORE TELEC/S 17.83% 9.58% 5.87%

Summary

TIM Participacoes beats SINGAPORE TELEC/S on 8 of the 13 factors compared between the two stocks.

About TIM Participacoes

TIM Participações S.A. provides telecommunication services in Brazil. It offers mobile voice and data, broadband Internet access, value-added, and other telecommunications services and products. The company offers prepaid and postpaid services; corporate solutions for mobile or fixed services, as well as mobile-to-mobile services; value-added services; financial and other services; digital channels; and customer services. It also provides landline telephone services, domestic long-distance and international long-distance voice services, personal mobile services, and multimedia communication services. In addition, the company sells various mobile handsets and accessories through its dealer network, which includes its own stores, exclusive franchises, and authorized dealers; and offers co-billing services to other telecommunication service providers. As of December 31, 2018, it served a subscriber base of 55.9 million customers; and had approximately 12.2 thousand points of sale, including 156 company owned stores, as well as had approximately 310 thousand points of sales to access prepaid phone services through supermarkets, newsstands, and other small retailers. The company was formerly known as Tele Celular Sul Participações S.A. and changed its name to TIM Participações S.A. in August 2004. The company was founded in 1998 and is headquartered in Rio de Janeiro, Brazil. TIM Participações S.A. is a subsidiary of TIM Brasil Serviços e Participações S.A.

About SINGAPORE TELEC/S

Singapore Telecommunications Limited provides a portfolio of communication and technology, and infotainment services to consumers and businesses in Asia, Australia, and Africa. It operates through three segments: Group Consumer, Group Enterprise, and Group Digital Life. The Group Consumer segment engages in the carriage business, including mobile, pay TV, fixed broadband, and voice, as well as equipment sales. The Group Enterprise segment offers mobile, equipment sales, fixed voice and data, managed, cloud computing, cyber security, and IT and professional consulting services. The Group Digital Life segment is involved in the digital marketing, regional OTT video, and advanced analytics and intelligence businesses. The company also operates a venture capital fund that focuses its investments on technologies and solutions; and offers ICT solutions and marketing technology services. In addition, it offers inSing.com that provides hyper-local content, user reviews, and editorials, as well as business or service information; and Trustwave that enables businesses fight cybercrime, protect data, and reduce security risk. The company is headquartered in Singapore.

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