T-Mobile US (NASDAQ:TMUS) and TIM (NYSE:TIMB) Head-To-Head Contrast

T-Mobile US (NASDAQ:TMUS) and TIM (NYSE:TIMB) are both communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
T-Mobile US	11.45%	20.16%	5.41%
TIM	15.73%	17.99%	7.74%

Analyst Recommendations

This is a summary of recent recommendations for T-Mobile US and TIM, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
T-Mobile US	0	8	21	1	2.77
TIM	1	8	2	1	2.25

T-Mobile US currently has a consensus target price of $252.08, suggesting a potential upside of 39.95%. TIM has a consensus target price of $25.38, suggesting a potential upside of 44.45%. Given TIM’s higher probable upside, analysts clearly believe TIM is more favorable than T-Mobile US.

Dividends

T-Mobile US pays an annual dividend of $4.08 per share and has a dividend yield of 2.3%. TIM pays an annual dividend of $1.04 per share and has a dividend yield of 5.9%. T-Mobile US pays out 42.7% of its earnings in the form of a dividend. TIM pays out 61.5% 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.

Risk & Volatility

T-Mobile US has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, TIM has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Valuation & Earnings

This table compares T-Mobile US and TIM”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
T-Mobile US	$88.31 billion	2.19	$10.99 billion	$9.55	18.86
TIM	$4.77 billion	1.78	$772.28 million	$1.69	10.40

T-Mobile US has higher revenue and earnings than TIM. TIM 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.

Insider & Institutional Ownership

42.5% of T-Mobile US shares are owned by institutional investors. 0.3% of T-Mobile US shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

T-Mobile US beats TIM on 11 of the 16 factors compared between the two stocks.

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 customers in the postpaid, prepaid, and wholesale and other services. It also provides wireless devices, including smartphones, wearables, tablets, home broadband routers, and other mobile communication devices, as well as wireless devices and accessories; financing through equipment installment plans; reinsurance for device insurance policies and extended warranty contracts; leasing through JUMP! On Demand; and High Speed Internet services. In addition, the company offers services, devices, and accessories under the T-Mobile and Metro by T-Mobile brands through its owned and operated retail stores, T-Mobile app and customer care channels, 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. The company was founded in 1994 and is headquartered in Bellevue, Washington.

About TIM

TIM S.A., a telecommunications company, provides mobile voice, data, and broadband services in Brazil. The company offers in mobile, landline, long-distance, and data transmission services. It also offers fixed ultra-broadband, fixed ultraband broadband, and digital content services. The company serves individuals and corporates, as well as small, medium, and large companies. TIM S.A is based in Rio de Janeiro, Brazil. The company operates as a subsidiary of TIM Brasil Serviços e Participações S.A.