KT (NYSE:KT) vs. Rogers Communication (NYSE:RCI) Critical Analysis

KT (NYSE:KT) and Rogers Communication (NYSE:RCI) are both communication services companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Institutional and Insider Ownership

18.9% of KT shares are owned by institutional investors. Comparatively, 45.5% of Rogers Communication shares are owned by institutional investors. 1.0% of KT shares are owned by insiders. Comparatively, 29.0% of Rogers Communication shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares KT and Rogers Communication’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KT	4.72%	6.45%	2.93%
Rogers Communication	27.54%	11.56%	3.05%

Analyst Recommendations

This is a summary of recent ratings for KT and Rogers Communication, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KT	0	3	0	0	2.00
Rogers Communication	1	2	6	0	2.56

KT presently has a consensus price target of $23.08, indicating a potential upside of 19.43%. Rogers Communication has a consensus price target of $36.00, indicating a potential upside of 3.33%. Given KT’s higher probable upside, research analysts clearly believe KT is more favorable than Rogers Communication.

Risk & Volatility

KT has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Rogers Communication has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Dividends

KT pays an annual dividend of $1.04 per share and has a dividend yield of 5.4%. Rogers Communication pays an annual dividend of $1.44 per share and has a dividend yield of 4.1%. KT pays out 55.9% of its earnings in the form of a dividend. Rogers Communication pays out 17.4% 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.

Valuation & Earnings

This table compares KT and Rogers Communication”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KT	$19.88 billion	0.47	$1.20 billion	$1.86	10.39
Rogers Communication	$15.54 billion	1.21	$4.93 billion	$8.28	4.21

Rogers Communication has lower revenue, but higher earnings than KT. Rogers Communication is trading at a lower price-to-earnings ratio than KT, indicating that it is currently the more affordable of the two stocks.

Summary

Rogers Communication beats KT on 12 of the 16 factors compared between the two stocks.

About KT

KT Corporation provides integrated telecommunications and platform services in Korea and internationally. The company offers mobile voice and data telecommunications services based on 5G, 4G LTE and 3G W-CDMA technology; fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services; broadband Internet access service and other Internet-related services; and data communication services, such as fixed-line and leased line services, as well as broadband Internet connection services. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and web comics and novels services; and credit card processing and other financial services. In addition, the company offers information technology and network services, and satellite services; sells handsets and miscellaneous telecommunications equipment; develops and sells residential units and commercial real estate; and rents real estate properties. Further, it maintains public telephones; offers security, B2C and B2B, investment fund, software development and data processing, value added network, call center, system integration and maintenance, marketing, PCS distribution, truck transportation and trucking arrangement business, cloud system implementation, satellite communication network, installation and management, and data center development and related services. Additionally, the company is involved in the Internet banking ASP and security solutions, residential building development and supply, sports team management, technology business finance, and submarine cable construction and maintenance businesses. The company was formerly known as Korea Telecom Corp. and changed its name to KT Corporation in March 2002. KT Corporation was founded in 1981 and is headquartered in Seongnam-si, South Korea.

About Rogers Communication

Rogers Communications Inc. operates as a communications and media company in Canada. It operates through three segments: Wireless, Cable, and Media. The company offers mobile Internet access, wireless voice and enhanced voice, device financing, device protection, global voice and data roaming, wireless home phone, bridging landline, machine-to-machine and Internet of Things solutions, and advanced wireless solutions for businesses, as well as device shipping and express pickup services; and postpaid and prepaid services under the Rogers, Fido, and chatr brands. It also provides internet and WiFi services; and monitoring, security, automation, energy efficiency, and smart control through smartphone app. In addition, the company offers local and network TV; on-demand television; cloud-based digital video recorders; voice-activated remote controls, and integrated apps; personal video recorders; linear and time-shifted programming; digital specialty channels; and 4K television programming. Further, it provides residential and small business local telephony services; voicemail, call waiting, and long distance; voice, data networking, Internet protocol (IP), and Ethernet services; private networking, Internet, IP voice, and cloud solutions; optical wave and multi-protocol label switching services; information technology and network technologies; cable access network services; telecommunications technical consulting services; and season games through television, smartphones, tablets, personal computers, and other streaming devices, as well as operates Ignite TV and Ignite TV app. Additionally, the company owns Toronto Blue Jays and the Rogers Centre event venue; and operates Sportsnet ONE, Sportsnet 360, Sportsnet World, Citytv, OMNI, FX (Canada), FXX (Canada), and OLN television networks, as well as 52 AM and FM radio stations. It also offers Rogers and the Rogers World Elite Mastercard. The company was founded in 1960 and is headquartered in Toronto, Canada.