A market review claimed that BCE is performing better than China Telecom in the New York Stock Exchange. The latter was labeled as a superior investment by assessing the risks associated with its investments and other financial factors that affect the value thereof as both large-cap utility companies.
According to Riverton Roll, market watchers looked into the risk, analysts' recommendations, institutional ownership, valuation, earnings, dividends, and profitability of China Telecom and BCE to determine who of the two large-cap utility companies have the superior investment.
It was showed that China Telecom had a beta of 0.7 having a share price of 30 percent less volatile compared to the S&P 500. In comparison with BCE, the company had a beta of 0.37 at a share price of 63 percent less volatile than the S&P 500.
It was shown that China Telecom generated more revenue and earnings than BCE this year. The winner is currently trading at a lower price-to-earnings ratio compared to BCE. The report then claimed that the result showed that China Telecom is more affordable than BCE.
The report also showed that China Telecom has a current consensus target price of $53.90. It was perceived to generate an upside of 37.32 percent. On the other hand, BCE has a consensus target price of $56.68 that could yield an upside of only 19.32 percent. Thus, the report concluded that since China Telecom has a higher possible upside, analysts claimed that China Telcom outperformed BCE once again.
Furthermore, the report then added that China Telecom's annual dividends amounted to $1.44 per share yields 3.7 percent. On the other hand, BCE pays a dividend of $2.39 yielding 5.0 percent. It was also revealed that China Telecom pays out 37.8 percent of its earnings as dividends while BCE pays out theirs at 88.2 percent. The analysts then concluded that the company may not have sufficient earnings to cover its dividend payments in the long-run.
The insider and institutional ownership of both the companies were also touched upon by the report. It was revealed that 0.5 percent of China Telecom shares are owned by institutional investors while BCE has 45.2 percent of its shared owned by the institutional investors too. However, 0.2 percent of the BCE shares were held by company insiders. Thus, the analysts claimed that strong institutional ownership proves that the company has endowments, hedge funds, and large money managers. Thus, the company may outperform the market over the long run.
In conclusion, the analysts then claimed that BCE had 10 favorable factors compared to China Telecom's six favorable factors.
In other news, the Stock Daily Dish claimed that shares for China Telecom may improve as its telecom firm ZTE is now removed from the US trade blacklist. However, the company would be under probation for three years and agreed to cooperate with the continuing investigation.
