Critical Survey: Iridium Communications (NASDAQ:IRDM) vs. Deutsche Telekom (OTCMKTS:DTEGY)

Iridium Communications (NASDAQ:IRDM) and Deutsche Telekom (OTCMKTS:DTEGY) are both communication services companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Valuation and Earnings

This table compares Iridium Communications and Deutsche Telekom”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iridium Communications	$871.66 million	5.08	$114.37 million	$1.51	27.64
Deutsche Telekom	$134.70 billion	1.04	$10.87 billion	$2.07	14.21

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Iridium Communications and Deutsche Telekom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iridium Communications	1	4	3	0	2.25
Deutsche Telekom	0	4	2	0	2.33

Iridium Communications currently has a consensus price target of $41.20, indicating a potential downside of 1.27%. Given Iridium Communications’ higher possible upside, research analysts clearly believe Iridium Communications is more favorable than Deutsche Telekom.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Iridium Communications	18.06%	22.04%	4.08%
Deutsche Telekom	7.18%	11.20%	3.51%

Insider and Institutional Ownership

84.4% of Iridium Communications shares are owned by institutional investors. 2.7% of Iridium Communications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Iridium Communications has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Deutsche Telekom has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Summary

Iridium Communications beats Deutsche Telekom on 10 of the 14 factors compared between the two stocks.

About Iridium Communications

Iridium Communications Inc. provides mobile voice and data communications services and products to businesses, the United States and international governments, non-governmental organizations, and consumers worldwide. The company offers postpaid mobile voice and data satellite communications; prepaid mobile voice satellite communications; push-to-talk; broadband data; and Internet of Things (IoT) services. It also provides hosted payload and other data services, such as satellite time and location services; and inbound connections from the public switched telephone network, short message, subscriber identity module, activation, customer reactivation, and other peripheral services. In addition, the company offers voice and data solutions comprising personnel tracking devices; asset tracking devices for equipment, vehicles, and aircrafts; beyond-line-of-sight aircraft communications applications; maritime communications applications; specialized communications solutions for high-value individuals; mobile communications and data devices for the military and other government agencies, such as secure satellite handsets, as well as netted voice, messaging, and paging services; and maintenance services for the United States government's dedicated gateway. Further, it provides satellite handsets, voice and data modems, broadband data devices, and IoT data devices; various accessories for its devices that include batteries, holsters, earbud headphones, portable auxiliary antennas, antenna adaptors, USB data cables, charging units, and others; and engineering and support services. Iridium Communications Inc. sells its products and services to commercial end users through a wholesale distribution network that include service providers, and value-added resellers and manufacturers. The company was formerly known as Iridium Holdings LLC and changed its name to Iridium Communications Inc. in September 2009. Iridium Communications Inc. is headquartered in McLean, Virginia.

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.