T-Mobile US (NASDAQ:TMUS) vs. SoftBank Group (OTCMKTS:SFTBY) Head to Head Comparison

SoftBank Group (OTCMKTS:SFTBY) and T-Mobile US (NASDAQ:TMUS) are both large-cap communication services companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of current ratings and target prices for SoftBank Group and T-Mobile US, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoftBank Group	1	2	5	0	2.50
T-Mobile US	0	6	21	1	2.82

T-Mobile US has a consensus target price of $242.21, indicating a potential upside of 65.04%. Given T-Mobile US’s stronger consensus rating and higher probable upside, analysts plainly believe T-Mobile US is more favorable than SoftBank Group.

Risk & Volatility

SoftBank Group has a beta of 1.91, meaning that its stock price is 91% more volatile than the S&P 500. Comparatively, T-Mobile US has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.

Profitability

This table compares SoftBank Group and T-Mobile US’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%
T-Mobile US	11.45%	20.16%	5.41%

Insider & Institutional Ownership

0.0% of SoftBank Group shares are owned by institutional investors. Comparatively, 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 large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

SoftBank Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. T-Mobile US pays an annual dividend of $4.68 per share and has a dividend yield of 3.2%. SoftBank Group pays out 0.7% of its earnings in the form of a dividend. T-Mobile US pays out 49.0% 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.

Valuation and Earnings

This table compares SoftBank Group and T-Mobile US”s 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	3.21	$31.29 billion	$2.83	5.15
T-Mobile US	$92.19 billion	1.71	$10.99 billion	$9.55	15.37

SoftBank Group has higher earnings, but lower revenue than T-Mobile US. SoftBank Group 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.

Summary

T-Mobile US beats SoftBank Group on 10 of the 17 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 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.