Critical Survey: Swisscom (OTCMKTS:SCMWY) and Globalstar (NASDAQ:GSAT)

Globalstar (NASDAQ:GSAT) and Swisscom (OTCMKTS:SCMWY) are both large-cap communication services companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Globalstar and Swisscom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Globalstar	-22.25%	-15.93%	-2.47%
Swisscom	8.86%	11.30%	3.71%

Institutional & Insider Ownership

18.9% of Globalstar shares are owned by institutional investors. 60.0% of Globalstar shares are owned by insiders. Comparatively, 1.0% of Swisscom shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Globalstar and Swisscom”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Globalstar	$272.99 million	39.35	-$8.65 million	($0.15)	-556.00
Swisscom	$18.16 billion	22.19	$1.53 billion	$3.20	24.30

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

Analyst Ratings

This is a breakdown of recent ratings for Globalstar and Swisscom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Globalstar	0	4	2	0	2.33
Swisscom	3	5	0	0	1.62

Globalstar presently has a consensus target price of $69.00, suggesting a potential downside of 17.27%. Given Globalstar’s stronger consensus rating and higher possible upside, research analysts plainly believe Globalstar is more favorable than Swisscom.

Volatility and Risk

Globalstar has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500. Comparatively, Swisscom has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500.

About Globalstar

Globalstar, Inc. provides mobile satellite services worldwide. The company offers duplex two-way voice and data products, including mobile voice and data satellite communications services and equipment for remote business continuity, recreational usage, safety, emergency preparedness and response, and other applications; fixed voice and data satellite communications services and equipment at industrial, commercial, and residential sites, as well as rural villages and ships; and data modem services and equipment. It also provides SPOT consumer retail products, such as SPOT satellite GPS messenger for personal tracking, emergency location, and messaging solutions; and SPOT Trace, an anti-theft and asset tracking device. In addition, the company offers commercial Internet of Things one-way transmission products to track cargo containers and rail cars, as well as to monitor utility meters, and oil and gas assets. Further, it sells wholesale minutes to independent gateway operators (IGOs); and provides engineering services, such as hardware and software designs to develop specific applications; and installation of gateways and antennas. The company distributes its products directly, as well as through independent agents, dealers and resellers, retailers, IGOs, and sales force and e-commerce Website. As of December 31, 2020, it had approximately 745,000 subscribers. The company primarily serves recreation and personal, government, public safety and disaster relief, oil and gas, maritime and fishing, construction, utilities, and transportation, as well as natural resources, mining, and forestry markets. Globalstar, Inc. has a strategic alliance with XCOM Labs to jointly commercialize XCOM’s capacity-multiplying technology with Globalstar’s Band n53 for 5G deployments in the United States and other countries where Globalstar has terrestrial rights. The company was founded in 1993 and is headquartered in Covington, Louisiana.

About Swisscom

Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally. It operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. The company offers mobile and fixed-network services, such as telephony, TV, broadband, and mobile offerings, as well as sells terminal equipment; and telecom and communications solutions for large corporations and small and medium-sized enterprises. It also provides cloud, outsourcing, workplace, mobile phone, networking, business process optimization, SAP, and security and authentication solutions, as well as a range of services to the banking industry; Internet of Things solutions; digitization services to the healthcare sector; IT systems for health insurance companies; fixed-line and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products. In addition, the company plans, operates, and maintains network infrastructure and IT systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband and mobile services, such as telephony, mobile offerings, and broadband services, as well as ICT solutions for residential, business, and wholesale customers. Further, it provides IT and network services; online and telephone directories; and cross-platform retail media and security communication services, as well as builds and maintains wired and wireless networks. The company was founded in 1998 and is based in Bern, Switzerland.