uCloudlink Group (NASDAQ:UCL) vs. SoftBank Group (OTCMKTS:SFTBY) Critical Review

SoftBank Group (OTCMKTS:SFTBY) and uCloudlink Group (NASDAQ:UCL) are both communication services companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Volatility & Risk

SoftBank Group has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500. Comparatively, uCloudlink Group has a beta of 4.08, indicating that its share price is 308% more volatile than the S&P 500.

Profitability

This table compares SoftBank Group and uCloudlink Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SoftBank Group	62.60%	26.14%	8.73%
uCloudlink Group	-0.31%	-0.88%	-0.37%

Institutional and Insider Ownership

0.0% of SoftBank Group shares are held by institutional investors. Comparatively, 85.5% of uCloudlink Group shares are held by institutional investors. 54.6% of uCloudlink Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for SoftBank Group and uCloudlink Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoftBank Group	1	2	5	0	2.50
uCloudlink Group	2	0	0	0	1.00

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SoftBank Group	$51.81 billion	3.98	$31.29 billion	$2.83	6.37
uCloudlink Group	$81.45 million	0.12	$6.30 million	($0.01)	-26.67

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

Summary

SoftBank Group beats uCloudlink Group on 10 of the 13 factors compared between the two stocks.

About SoftBank Group

SoftBank Group Corp. provides telecommunication services in Japan and internationally. It operates through Investment Business of Holding Companies, SoftBank Vision Funds, SoftBank, Arm, and Other segments. The company offers mobile communications and solutions to enterprise customers, and broadband services to retail customers; and sells mobile devices and software tools, as well as related services. It also provides internet advertising and e-commerce services; payment and financial services; ICT services products to enterprise customers; and communication device-related products and IoT equipment to retail customers. In addition, the company engages in design of microprocessor intellectual property and related technology; alternative investment management; ownership of professional baseball team; operation of baseball games; management and maintenance of baseball stadium and other sports facilities; distribution of video, voice, and data content via media businesses. Further, it engages in the certification services, security solutions, and Linux / OSS businesses; operation of comprehensive IT information site ITmedia; sale of indirect materials such as consumable supplies; facility management; planning and operation of fashion e-commerce website; operational support of brands' own e-commerce website; operation of fashion coordination app; management of few funds; generation of electricity from renewable energy sources; and supply and sale of electricity. The company was formerly known as SoftBank Corp. and changed its name to SoftBank Group Corp. in July 2015. SoftBank Group Corp. was incorporated in 1981 and is headquartered in Tokyo, Japan.

About uCloudlink Group

uCloudlink Group Inc. operates as a mobile data traffic sharing marketplace in the telecommunications industry. The company provides uCloudlink 1.0, a model that focuses on cross-border travelers that need mobile data connectivity services in various countries; and operates portable Wi-Fi services under the Roamingman name in China and Malaysia, which provides global mobile data connectivity services, as well as offers GlocalMe portable Wi-Fi terminals and cloud SIM architecture for mobile virtual network operators, mobile network operators (MNOs), and portable Wi-Fi terminal rental companies. It also offers uCloudlink 2.0, a model that provides mobile data connectivity services to local users through various MNOs; GlocalMe Inside, an implementation solution for smartphones and other smart hardware products, which enables them to access its cloud SIM architecture and SIM card pool; and GlocalMe, a world phone series. In addition, the company provides IoT modules with GlocalMe Inside implementation to meet the demand for mobile data from various terminals, as well as provides integrated network solutions to its customers; SIM cards with prepaid data packages; and value-added services, such as advertisement. Further, it's platform-as-a-service/software-as-a-service offers modules, such as customer relationship management, operations and business support system, and SIM card enterprise resource planning and management. uCloudlink Group Inc. was incorporated in 2014 and is headquartered in Tsim Sha Tsui, Hong Kong.