Critical Analysis: Deutsche Telekom (OTCMKTS:DTEGY) and Uniti Group (NASDAQ:UNIT)

Uniti Group (NASDAQ:UNIT) and Deutsche Telekom (OTCMKTS:DTEGY) are both communication services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Analyst Ratings

This is a summary of current ratings and price targets for Uniti Group and Deutsche Telekom, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Uniti Group	0	7	1	1	2.33
Deutsche Telekom	0	3	2	0	2.40

Uniti Group presently has a consensus target price of $10.92, suggesting a potential upside of 8.41%. Given Uniti Group’s higher possible upside, equities research analysts clearly believe Uniti Group is more favorable than Deutsche Telekom.

Insider & Institutional Ownership

87.5% of Uniti Group shares are held by institutional investors. 1.9% of Uniti Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Uniti Group and Deutsche Telekom”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Uniti Group	$2.23 billion	1.09	$1.30 billion	$2.71	3.72
Deutsche Telekom	$134.70 billion	1.18	$10.87 billion	$2.07	16.01

Deutsche Telekom has higher revenue and earnings than Uniti Group. Uniti Group is trading at a lower price-to-earnings ratio than Deutsche Telekom, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Uniti Group has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, Deutsche Telekom has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Profitability

This table compares Uniti Group and Deutsche Telekom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Uniti Group	28.68%	-133.07%	-4.09%
Deutsche Telekom	7.18%	11.20%	3.51%

Summary

Deutsche Telekom beats Uniti Group on 8 of the 15 factors compared between the two stocks.

About Uniti Group

Uniti Group, Inc. is a real estate investment trust company, which engages in the acquisition, construction, and leasing of properties. It operates through the following business segments: Uniti Leasing, Uniti Fiber, and Corporate. The Uniti Leasing segment involves mission-critical communications assets on exclusive or shared-tenant basis, and dark fiber network. The Uniti Fiber segment includes the operation of infrastructure solutions, cell site backhauls, and dark fiber. The Corporate segment consists of office and shared service functions. The company was founded in February 2014 and is headquartered in Little Rock, AR.

About Deutsche Telekom

Deutsche Telekom AG, together with its subsidiaries, provides integrated telecommunication services. The company operates through Germany, United States, Europe, Systems Solutions, Group Development, and Group Headquarters and Group Services segments. It offers fixed-network services, including voice and data communication services based on fixed-network and broadband technology; and sells terminal equipment and other hardware products, as well as services to resellers. In addition, the company provides mobile voice and data services to consumers and business customers; sells mobile devices and other hardware products; and sells mobile services to resellers and to companies that purchases and markets network services to third parties, such as mobile virtual network operators. Further, it offers internet services; internet-based TV products and services; and information and communication technology systems for multinational corporations and public sector institutions with an infrastructure of data centers and network services. Additionally, the company provides wireless communications services; and cloud services, digital solutions, security, and advisory solutions. Deutsche Telekom AG has mobile customers and broadband customers, as well as fixed-network lines. The company was incorporated in 1995 and is headquartered in Bonn, Germany.