SoftBank Group (OTCMKTS:SFTBY) versus T-Mobile US (NASDAQ:TMUS) Head-To-Head Analysis

T-Mobile US (NASDAQ:TMUS) and SoftBank Group (OTCMKTS:SFTBY) are both large-cap communication services companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Profitability

This table compares T-Mobile US and SoftBank Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
T-Mobile US	11.45%	20.16%	5.41%
SoftBank Group	62.60%	26.14%	8.73%

Dividends

T-Mobile US pays an annual dividend of $4.68 per share and has a dividend yield of 3.2%. SoftBank Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. T-Mobile US pays out 49.0% of its earnings in the form of a dividend. SoftBank Group pays out 0.7% 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.

Insider and Institutional Ownership

42.5% of T-Mobile US shares are owned by institutional investors. Comparatively, 0.0% of SoftBank Group shares are owned by institutional investors. 0.3% of T-Mobile US shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares T-Mobile US and SoftBank Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
T-Mobile US	$92.19 billion	1.71	$10.99 billion	$9.55	15.37
SoftBank Group	$51.81 billion	3.21	$31.29 billion	$2.83	5.15

SoftBank Group has lower revenue, but higher earnings than T-Mobile US. SoftBank Group 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.

Volatility & Risk

T-Mobile US has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, SoftBank Group has a beta of 1.91, meaning that its share price is 91% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for T-Mobile US and SoftBank Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
T-Mobile US	0	6	21	1	2.82
SoftBank Group	1	2	5	0	2.50

T-Mobile US presently has a consensus price target of $242.21, indicating a potential upside of 65.04%. Given T-Mobile US’s stronger consensus rating and higher possible upside, equities research analysts clearly believe T-Mobile US is more favorable than SoftBank Group.

Summary

T-Mobile US beats SoftBank Group on 10 of the 17 factors compared between the two stocks.

About T-Mobile US

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to customers in the postpaid, prepaid, and wholesale and other services. It also provides wireless devices, including smartphones, wearables, tablets, home broadband routers, and other mobile communication devices, as well as wireless devices and accessories; financing through equipment installment plans; reinsurance for device insurance policies and extended warranty contracts; leasing through JUMP! On Demand; and High Speed Internet services. In addition, the company offers services, devices, and accessories under the T-Mobile and Metro by T-Mobile brands through its owned and operated retail stores, T-Mobile app and customer care channels, and its websites. It also sells its devices to dealers and other third-party distributors for resale through independent third-party retail outlets and various third-party websites. The company was founded in 1994 and is headquartered in Bellevue, Washington.

About SoftBank Group

SoftBank Group Corp. provides telecommunication services in Japan and internationally. It operates through Investment Business of Holding Companies, SoftBank Vision Funds, SoftBank, Arm, and Other segments. The company offers mobile communications and solutions to enterprise customers, and broadband services to retail customers; and sells mobile devices and software tools, as well as related services. It also provides internet advertising and e-commerce services; payment and financial services; ICT services products to enterprise customers; and communication device-related products and IoT equipment to retail customers. In addition, the company engages in design of microprocessor intellectual property and related technology; alternative investment management; ownership of professional baseball team; operation of baseball games; management and maintenance of baseball stadium and other sports facilities; distribution of video, voice, and data content via media businesses. Further, it engages in the certification services, security solutions, and Linux / OSS businesses; operation of comprehensive IT information site ITmedia; sale of indirect materials such as consumable supplies; facility management; planning and operation of fashion e-commerce website; operational support of brands' own e-commerce website; operation of fashion coordination app; management of few funds; generation of electricity from renewable energy sources; and supply and sale of electricity. The company was formerly known as SoftBank Corp. and changed its name to SoftBank Group Corp. in July 2015. SoftBank Group Corp. was incorporated in 1981 and is headquartered in Tokyo, Japan.