Reviewing Nokia Oyj (NOK) and NTT Docomo (DCM)

Nokia Oyj (NYSE: DCM) and NTT Docomo (NYSE:DCM) are both large-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations for Nokia Oyj and NTT Docomo, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nokia Oyj 1 8 6 0 2.33
NTT Docomo 1 2 0 0 1.67

Nokia Oyj presently has a consensus target price of $5.39, suggesting a potential downside of 2.09%. Given Nokia Oyj’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Nokia Oyj is more favorable than NTT Docomo.

Dividends

Nokia Oyj pays an annual dividend of $0.20 per share and has a dividend yield of 3.6%. NTT Docomo pays an annual dividend of $0.39 per share and has a dividend yield of 1.5%. Nokia Oyj pays out 54.1% of its earnings in the form of a dividend. NTT Docomo pays out 24.1% 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. NTT Docomo has raised its dividend for 2 consecutive years.

Insider & Institutional Ownership

6.8% of Nokia Oyj shares are owned by institutional investors. Comparatively, 0.6% of NTT Docomo shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Nokia Oyj and NTT Docomo’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nokia Oyj $26.15 billion 1.18 -$1.69 billion $0.37 14.86
NTT Docomo $42.41 billion 2.24 $6.07 billion $1.62 15.80

NTT Docomo has higher revenue and earnings than Nokia Oyj. Nokia Oyj is trading at a lower price-to-earnings ratio than NTT Docomo, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Nokia Oyj and NTT Docomo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nokia Oyj -4.56% 9.10% 3.64%
NTT Docomo 15.25% 12.38% 9.34%

Volatility & Risk

Nokia Oyj has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, NTT Docomo has a beta of 0.1, meaning that its share price is 90% less volatile than the S&P 500.

Summary

NTT Docomo beats Nokia Oyj on 9 of the 16 factors compared between the two stocks.

About Nokia Oyj

Nokia Corporation engages in the network and technology businesses worldwide. The company operates through four segments: Ultra Broadband Networks, Global Services, IP Networks and Applications, and Nokia Technologies. It provides mobile networking solutions, including hardware, software, and services for telecommunications operators, enterprises, and related markets/verticals. It also offers fixed networking solutions, such as copper based solutions; fiber-to-the-home solutions, including Ethernet point-to-point, gigabit passive optical networks, EPON, and 10 gigabit next generation fiber technologies; fiber access products, solutions, and services; and public switched telephone network transformation, ultra-broadband network design, deployment and operation, site implementation and outside plant, and multi-vendor maintenance services. In addition, the company provides network implementation, care, and professional services for mobile networks; and managed services, such as network and service management, build-operate-transfer model, hosting, analytics, Internet of Things (IoT), cloud, and security operation services for the fixed, mobile, applications, Internet protocol (IP), and optical domains. Further, it offers network planning and optimization services to enhance the network performance and quality, and analytics-based services; and network architecture, integration, customization, and migration services. Additionally, the company provides IP/optical networking solutions, including IP routing and optical transport systems, software, and services; software solutions, such as customer experience management, network operations and management, communications and collaborations, policy and charging, as well as Cloud, IoT, security, and analytics platforms; and submarine networks and radio frequency systems. Nokia Corporation has a collaboration agreement with Filtronic. The company was founded in 1865 and is headquartered in Espoo, Finland.

About NTT Docomo

NTT DOCOMO, INC. (DOCOMO) is a mobile telecommunications carrier. The Company operates through three segments: telecommunications business, smart life business and other businesses. The telecommunications business segment includes mobile phone services (long-term evolution (LTE) (Xi) services and freedom of mobile multimedia access (FOMA) services), optical-fiber broadband service, satellite mobile communications services, international services and equipment sales related to these services. The smart life business segment includes video and music distribution, electronic books and other services offered through its dmarket portal, as well as finance/payment services, shopping services and various other services to support the Company’s customers’ daily lives. Its other businesses segment primarily includes Mobile Device Protection Service, as well as the development, sale and maintenance of information technology (IT) systems.

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