Reviewing SK Telecom (SKM) and T-Mobile US (TMUS)

SK Telecom (NYSE: SKM) and T-Mobile US (NASDAQ:TMUS) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Risk & Volatility

SK Telecom has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, T-Mobile US has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Dividends

SK Telecom pays an annual dividend of $1.54 per share and has a dividend yield of 6.7%. T-Mobile US does not pay a dividend. SK Telecom pays out 42.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings for SK Telecom and T-Mobile US, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SK Telecom 1 3 2 0 2.17
T-Mobile US 1 3 16 4 2.96

T-Mobile US has a consensus price target of $71.64, indicating a potential upside of 25.84%. Given T-Mobile US’s stronger consensus rating and higher probable upside, analysts plainly believe T-Mobile US is more favorable than SK Telecom.

Institutional and Insider Ownership

11.3% of SK Telecom shares are held by institutional investors. Comparatively, 36.1% of T-Mobile US shares are held by institutional investors. 1.0% of SK Telecom shares are held by company insiders. Comparatively, 0.4% of T-Mobile US shares are held by company 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.

Profitability

This table compares SK Telecom and T-Mobile US’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SK Telecom 16.16% 20.30% 11.13%
T-Mobile US 10.90% 10.41% 3.20%

Earnings & Valuation

This table compares SK Telecom and T-Mobile US’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SK Telecom $15.77 billion 0.93 $2.34 billion $3.66 6.29
T-Mobile US $40.60 billion 1.19 $4.54 billion $2.29 24.86

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

Summary

T-Mobile US beats SK Telecom on 10 of the 17 factors compared between the two stocks.

About SK Telecom

SK Telecom Co., Ltd. provides wireless telecommunications services in South Korea. It offers wireless voice transmission services; cellular global roaming services; and interconnection services to connect its networks to fixed-line and other wireless networks. The company also provides wireless data communication services that allow subscribers to text, graphic, audio, and video messages; and wireless Internet services. In addition, it offers broadband Internet access; video-on-demand and Internet protocol TV services; and fixed-line telephone services, such as local, domestic long distance, international long distance, and voice over Internet protocol services. Further, the company provides business communications services, including leased line solutions, Internet data center solutions, and network solution services; engages in marketplace and O2O commerce businesses; manufactures and sells projection display devices, high-end audio devices, and intelligent agent machines; and offers a portal service under Nate brand name. As of December 31, 2015, it had 28.6 million wireless subscribers. SK Telecom Co., Ltd. has a collaboration agreement with Deutsche Telekom AG, Huawei, AT&T, Nokia, Ericsson, Qualcomm Technologies, and Samsung for the development and standardization of 5G. The company was formerly known as Korea Mobile Telecommunications Co., Ltd. and changed its name to SK Telecom Co., Ltd. in March 1997. SK Telecom Co., Ltd. was founded in 1984 and is headquartered in Seoul, South Korea.

About T-Mobile US

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to 72.6 million customers in the postpaid, prepaid, and wholesale markets. It also provides wireless devices, including smartphones, tablets, and other mobile communication devices, as well as accessories that are manufactured by various suppliers. In addition, the company offers services, devices, and accessories under the T-Mobile and MetroPCS brands through its owned and operated retail stores, third party distributors, and its Websites. It also sells its devices to dealers and other third party distributors for resale through independent third-party retail outlets and various third-party Websites. As of December 31, 2017, T-Mobile US, Inc. operated approximately 2,200 T-Mobile and MetroPCS retail locations, including stores and kiosks. The company was founded in 1994 and is headquartered in Bellevue, Washington. T-Mobile US, Inc. is a subsidiary of Deutsche Telekom AG.

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