SES (OTCMKTS:SGBAF) versus PLDT (NYSE:PHI) Critical Analysis

PLDT (NYSE:PHI) and SES (OTCMKTS:SGBAF) are both mid-cap communication services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Institutional and Insider Ownership

2.3% of PLDT shares are owned by institutional investors. 0.7% of PLDT shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for PLDT and SES, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PLDT	0	4	0	0	2.00
SES	2	1	0	0	1.33

Valuation & Earnings

This table compares PLDT and SES”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PLDT	$220.89 billion	0.02	$498.72 million	$2.22	8.15
SES	$2.97 billion	1.03	-$107.48 million	($0.88)	-6.22

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

Profitability

This table compares PLDT and SES’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PLDT	12.81%	26.76%	5.36%
SES	-8.96%	-9.43%	-1.93%

Dividends

PLDT pays an annual dividend of $1.08 per share and has a dividend yield of 6.0%. SES pays an annual dividend of $0.50 per share and has a dividend yield of 9.1%. PLDT pays out 48.6% of its earnings in the form of a dividend. SES pays out -56.8% 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. SES is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

PLDT has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, SES has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Summary

PLDT beats SES on 10 of the 14 factors compared between the two stocks.

About PLDT

PLDT Inc. provides telecommunications and digital services in the Philippines. The company operates through three segments: Wireless, Fixed Line, and Others. It offers cellular mobile, Internet broadband distribution, operations support, software development, and satellite information and messaging services; and sells Wi-Fi access equipment. The company also provides fixed line telecommunications services; business infrastructure and solutions; intelligent data processing and implementation, and data analytics insight generation services; and information and communications infrastructure for Internet-based services, e-commerce, customer relationship management, and information technology (IT) related services. In addition, it offers managed IT outsourcing, Internet-based purchasing, IT consulting and professional, and bills printing and other related value-added services; distributes Filipino channels and content services; and provides full-services customer rewards and loyalty programs. Further, the company engages in the sale of mobile handsets, broadband data routers, tablets, and accessories; and cross-border digital platforms. Additionally, it provides gaming support services; mobile internet and broadband, and data services; content provider and develops mobile application; IT solution; data and network; domestic leased lines; alternative messaging solutions, such as over-the-top services, social media, and messenger application; inbound roaming and other services; mobile prepaid and postpaid services; and fixed wireless broadband services. The company was formerly known as Philippine Long Distance Telephone Company and changed its name to PLDT Inc. in July 2016. PLDT Inc. was incorporated in 1928 and is headquartered in Makati City, the Philippines.

About SES

SES S.A. provides satellite-based data transmission capacity and ancillary services worldwide. The company offers content connectivity solutions, including network spanning satellite and ground infrastructure to create, deliver, and manage video and data solutions. It also provides data connectivity services through its fleet of geostationary earth orbit and medium earth orbit satellites to the aviation, cloud, cruise, energy, government, maritime, and telco and mobile network operator industries. In addition, the company offers video services, which includes end-to-end managed services to audience; and provides multi-screen and multi-device viewing experiences on linear channels, video-on-demand, streaming platforms, and social media sites for broadcasters, platform operators, and sports organizations. Further, it provides linear video aggregation and distribution, such as direct-to-home, direct-to-cable, and internet protocol TV households; channel management solutions comprising playout; and live feeds and redundancy features. The company was formerly known as SES Global SA and changed its name to SES S.A. in December 2006. SES S.A. was founded in 1985 and is headquartered in Betzdorf, Luxembourg.