Comparing AT&T (NYSE:T) and Chunghwa Telecom (NYSE:CHT)

AT&T (NYSE:T) and Chunghwa Telecom (NYSE:CHT) are both large-cap communication services companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Dividends

AT&T pays an annual dividend of $1.11 per share and has a dividend yield of 5.1%. Chunghwa Telecom pays an annual dividend of $1.25 per share and has a dividend yield of 2.6%. AT&T pays out 60.0% of its earnings in the form of a dividend. Chunghwa Telecom pays out 72.3% 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. AT&T is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and price targets for AT&T and Chunghwa Telecom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AT&T	1	9	12	0	2.50
Chunghwa Telecom	0	2	0	0	2.00

AT&T presently has a consensus target price of $27.56, indicating a potential upside of 26.39%. Given AT&T’s stronger consensus rating and higher probable upside, equities analysts plainly believe AT&T is more favorable than Chunghwa Telecom.

Insider & Institutional Ownership

57.1% of AT&T shares are held by institutional investors. Comparatively, 2.1% of Chunghwa Telecom shares are held by institutional investors. 0.1% of AT&T shares are held by insiders. Comparatively, 1.0% of Chunghwa Telecom shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

AT&T has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500. Comparatively, Chunghwa Telecom has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500.

Earnings & Valuation

This table compares AT&T and Chunghwa Telecom”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AT&T	$125.65 billion	1.17	$21.95 billion	$1.85	11.79
Chunghwa Telecom	$7.58 billion	4.99	$1.23 billion	$1.73	28.19

AT&T has higher revenue and earnings than Chunghwa Telecom. AT&T is trading at a lower price-to-earnings ratio than Chunghwa Telecom, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares AT&T and Chunghwa Telecom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AT&T	10.19%	13.41%	3.92%
Chunghwa Telecom	16.58%	10.61%	7.73%

Summary

AT&T beats Chunghwa Telecom on 11 of the 16 factors compared between the two stocks.

About AT&T

AT&T, Inc. is a holding company, which engages in the provision of telecommunications and technology services. It operates through the Communications and Latin America segments. The Communications segment offers wireless, wireline telecom, and broadband services to businesses and consumers located in the US and businesses globally. The Latin America segment provides wireless services and equipment in Mexico. The company was founded in 1983 and is headquartered in Dallas, TX.

About Chunghwa Telecom

Chunghwa Telecom Co., Ltd., together with its subsidiaries, provides telecommunication services in Taiwan and internationally. It operates through Consumer Business, Enterprise Business, International Business, and Others segments. The company offers local, domestic long distance, and international long distance fixed-line telephone services; mobile services such as prepaid and postpaid plans; broadband plans; and internet and data services. Chunghwa Telecom Co., Ltd. was incorporated in 1996 and is headquartered in Taipei City, Taiwan.