Analyzing Swisscom (OTCMKTS:SCMWY) and Its Rivals

Swisscom (OTCMKTS: SCMWY) is one of 73 publicly-traded companies in the “Telephone communication, except radio” industry, but how does it compare to its peers? We will compare Swisscom to similar companies based on the strength of its analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.

Valuation & Earnings

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This table compares Swisscom and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Swisscom $11.85 billion $1.60 billion 15.26
Swisscom Competitors $17.40 billion $2.02 billion 18.07

Swisscom’s peers have higher revenue and earnings than Swisscom. Swisscom is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Swisscom pays an annual dividend of $1.97 per share and has a dividend yield of 4.2%. Swisscom pays out 64.0% of its earnings in the form of a dividend. As a group, “Telephone communication, except radio” companies pay a dividend yield of 3.9% and pay out 72.5% of their earnings in the form of a dividend. Swisscom is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for Swisscom and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Swisscom 1 1 1 0 2.00
Swisscom Competitors 608 1862 1945 98 2.34

As a group, “Telephone communication, except radio” companies have a potential upside of 63.71%. Given Swisscom’s peers stronger consensus rating and higher possible upside, analysts clearly believe Swisscom has less favorable growth aspects than its peers.

Profitability

This table compares Swisscom and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Swisscom 13.47% 22.25% 7.22%
Swisscom Competitors -12.56% -11.21% -0.99%

Insider and Institutional Ownership

0.1% of Swisscom shares are held by institutional investors. Comparatively, 46.9% of shares of all “Telephone communication, except radio” companies are held by institutional investors. 1.0% of Swisscom shares are held by company insiders. Comparatively, 7.3% of shares of all “Telephone communication, except radio” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Swisscom has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Swisscom’s peers have a beta of 0.59, meaning that their average share price is 41% less volatile than the S&P 500.

Summary

Swisscom peers beat Swisscom on 10 of the 15 factors compared.

About Swisscom

Swisscom AG provides telecommunication services primarily in Switzerland and Italy. The company operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. It offers broadband, TV, fixed-network, and mobile phone subscription services, as well as national and international telephone, and data traffic services for residential customers, and small and medium-sized enterprises. The company also provides cloud, outsourcing, workplace, UCC, mobile phone, networking, business process optimization, SAP, Internet of Things, security and authentication, digital consulting, and software development solutions primarily for banking, hospital, and health insurance industries; fixed and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products. In addition, it plans, operates, and maintains network infrastructure and related information technology (IT) systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband services, such as voice, data, and TV services, as well as video-on-demand for residential and corporate customers. Further, the company provides mobile phone services; IT and network services, and customized solutions; and online and telephone directories, as well as sells merchandise products. Additionally, it offers collection services for radio and TV license fees; radio and cross platform services for customers in the media field; and securitized radio transmissions services, as well as constructs and maintains wired and wireless networks. Swisscom AG was founded in 1998 and is headquartered in Worblaufen, Switzerland.

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