Financial Contrast: T-Mobile Us (NYSE:PCS) versus TIM Participacoes (TSU)

TIM Participacoes (NYSE: TSU) and T-Mobile Us (NYSE:PCS) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.

Insider & Institutional Ownership

15.5% of TIM Participacoes shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares TIM Participacoes and T-Mobile Us’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TIM Participacoes $4.50 billion 2.11 $215.14 million $0.63 31.11
T-Mobile Us N/A N/A N/A $0.24 49.33

TIM Participacoes has higher revenue and earnings than T-Mobile Us. TIM Participacoes 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.

Dividends

TIM Participacoes pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. T-Mobile Us does not pay a dividend. TIM Participacoes pays out 25.4% of its earnings in the form of a dividend.

Profitability

This table compares TIM Participacoes and T-Mobile Us’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TIM Participacoes 5.57% 5.71% 3.02%
T-Mobile Us N/A N/A N/A

Analyst Recommendations

This is a breakdown of current recommendations and price targets for TIM Participacoes and T-Mobile Us, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TIM Participacoes 0 2 6 0 2.75
T-Mobile Us 0 1 6 0 2.86

TIM Participacoes currently has a consensus price target of $19.60, suggesting a potential upside of 0.00%. T-Mobile Us has a consensus price target of $71.29, suggesting a potential upside of 502.08%. Given T-Mobile Us’ stronger consensus rating and higher probable upside, analysts clearly believe T-Mobile Us is more favorable than TIM Participacoes.

Summary

TIM Participacoes beats T-Mobile Us on 7 of the 11 factors compared between the two stocks.

TIM Participacoes Company Profile

TIM Participacoes S.A. (TIM) is a provider of mobile telecommunication services in Brazil. The Company, through its subsidiaries in various telecommunications markets, operates mobile, fixed and long distance telephony, data transmission and ultra-broadband services. Its direct subsidiaries include TIM Celular S.A., which provides landline telephone services (commuted fixed telephonic service (STFC))-domestic long distance and international long distance voice services, personal mobile service (SMP) and multimedia communication service (multimedia service of communication (SCM)) in all Brazilian states and in the Federal District, and Intelig Telecomunicacoes Ltda., which provides STFC-local voices services and SCM services in all Brazilian states and in the Federal District. Its consumer plans include prepaid plans, post-paid plans and controle plans. It offers value-added services, including short message services or text messaging, multimedia messaging services and push-mail.

T-Mobile Us Company Profile

MetroPCS Communications, Inc. (MetroPCS Communications) is a facilities-based wireless broadband mobile communications provider in the United States, including the Atlanta, Boston, Dallas/Fort Worth, Detroit, Las Vegas, Los Angeles, Miami, New York, Orlando/Jacksonville, Philadelphia, Sacramento, San Francisco, and Tampa/Sarasota metropolitan areas. It offers wireless broadband mobile services under the MetroPCS brand in selected metropolitan areas in the United States. It provides a variety of wireless broadband mobile communications services to its customers on a no long-term contract, paid-in-advance basis. As of December 31, 2011, it had over 9.3 million customers. All of its services are provided through wholly owned subsidiaries of MetroPCS Wireless, Inc., an indirect wholly owned subsidiary of MetroPCS Communications. In January 2011, it introduced long term evolution (4G LTE) service plans.

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