Nippon Telegraph & Telephone (OTCMKTS:NTTYY) & ATN International (OTCMKTS:ATNI) Critical Survey

Nippon Telegraph & Telephone (OTCMKTS:NTTYY) and ATN International (NASDAQ:ATNI) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Profitability

This table compares Nippon Telegraph & Telephone and ATN International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nippon Telegraph & Telephone 7.07% 7.21% 3.80%
ATN International 3.57% 1.92% 1.37%

Volatility & Risk

Nippon Telegraph & Telephone has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500. Comparatively, ATN International has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Dividends

Nippon Telegraph & Telephone pays an annual dividend of $1.67 per share and has a dividend yield of 3.4%. ATN International pays an annual dividend of $0.68 per share and has a dividend yield of 1.1%. Nippon Telegraph & Telephone pays out 41.8% of its earnings in the form of a dividend. ATN International pays out 52.7% 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. Nippon Telegraph & Telephone is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Nippon Telegraph & Telephone and ATN International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nippon Telegraph & Telephone $107.88 billion 0.89 $7.69 billion $4.00 12.15
ATN International $451.21 million 2.20 $19.82 million $1.29 48.12

Nippon Telegraph & Telephone has higher revenue and earnings than ATN International. Nippon Telegraph & Telephone is trading at a lower price-to-earnings ratio than ATN International, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

0.2% of Nippon Telegraph & Telephone shares are owned by institutional investors. Comparatively, 63.9% of ATN International shares are owned by institutional investors. 4.3% of ATN International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Nippon Telegraph & Telephone and ATN International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nippon Telegraph & Telephone 0 1 0 0 2.00
ATN International 0 0 3 0 3.00

ATN International has a consensus target price of $67.50, suggesting a potential upside of 8.73%. Given ATN International’s stronger consensus rating and higher possible upside, analysts plainly believe ATN International is more favorable than Nippon Telegraph & Telephone.

Nippon Telegraph & Telephone Company Profile

Nippon Telegraph and Telephone Corporation, together with its subsidiaries, provides fixed and mobile voice related services, IP/packet communications services, telecommunications equipment, system integration, and other services in Japan and internationally. It operates through five segments: Regional Communications Business, Long Distance and International Communications Business, Mobile Communications Business, Data Communications Business, and Other Business. The company offers inter-prefectural communications services, services related to the international communications and solutions business, and related services; mobile phone and related services; and network system and system integration services. It also provides IT system building and maintenance support for corporations; professional security, ICT, data center-related, teleconference, Web conference, video conference, Internet connection, video distribution, and smart life area services; and consulting, and system design and development services. In addition, the company engages in the acquisition, development, leasing, and management of real estate properties; lease and installment sales of telecommunications-related devices; billing and collection of charges for communications and other services; and design, management, and maintenance of buildings, equipment, and electric power facilities. Further, it is involved in the development, production, operation, and maintenance of information communications systems and software; and technology transfer and consulting activities, as well as provision of credit card transaction settlement services. Additionally, the company operates office, retail, and residential properties under the Wellith brand; hotels and resorts; and shared-office properties that include daycare facilities and office spaces. As of March 31, 2018, it had 19,869 thousand fixed line subscriptions. The company was founded in 1952 and is headquartered in Tokyo, Japan.

ATN International Company Profile

ATN International, Inc., through its subsidiaries, provides wireless and wireline telecommunications services in North America, India, Bermuda, and the Caribbean. It operates through three segments: U.S. Telecom, International Telecom, and Renewable Energy. The U.S. Telecom segment offers wireless and wireline services; wholesale wireless voice and data roaming services to wireless carriers principally in the Southwest and Midwest the United States; and retail wireless, wireline, and wholesale long-distance voice services to telecommunications carriers. The International Telecom segment provides wireless services, including voice and data services to retail customers in Bermuda, Guyana, and the U.S. Virgin Islands; and wireline services, such as voice and data services in Bermuda, the Cayman Islands, Guyana, and the U.S. Virgin Islands, as well as video services in Bermuda, the Cayman Islands, and the U.S. Virgin Islands. This segment also offers wholesale long-distance voice services to other telecommunications carriers. The Renewable Energy segment provides distributed generation solar power to corporate, utility, and municipal customers in India, as well as in Massachusetts, California, and New Jersey. As of December 31, 2018, it operated 12 retail stores in U.S. Telecom segment and 19 retail stores in International Telecom segment. The company was formerly known as Atlantic Tele-Network, Inc. and changed its name to ATN International, Inc. in June 2016. ATN International, Inc. was founded in 1987 and is headquartered in Beverly, Massachusetts.

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