Reviewing BlackBerry (BB) & China Telecom (CHA)

BlackBerry (NYSE: BB) and China Telecom (NYSE:CHA) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.

Volatility & Risk

BlackBerry has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, China Telecom has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for BlackBerry and China Telecom, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackBerry 3 7 5 0 2.13
China Telecom 0 0 1 0 3.00

BlackBerry presently has a consensus price target of $10.34, indicating a potential downside of 24.22%. Given BlackBerry’s higher probable upside, equities research analysts plainly believe BlackBerry is more favorable than China Telecom.

Profitability

This table compares BlackBerry and China Telecom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackBerry 37.36% 3.70% 2.44%
China Telecom N/A N/A N/A

Dividends

China Telecom pays an annual dividend of $1.21 per share and has a dividend yield of 2.5%. BlackBerry does not pay a dividend. China Telecom pays out 33.3% of its earnings in the form of a dividend.

Insider & Institutional Ownership

58.5% of BlackBerry shares are owned by institutional investors. Comparatively, 0.4% of China Telecom shares are owned by institutional investors. 22.7% of BlackBerry shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares BlackBerry and China Telecom’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BlackBerry $1.31 billion 5.59 -$1.21 billion $0.54 25.28
China Telecom $53.05 billion 0.73 $2.71 billion $3.63 13.26

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

Summary

BlackBerry beats China Telecom on 11 of the 16 factors compared between the two stocks.

About BlackBerry

BlackBerry Limited (BlackBerry) provides mobile communications solutions. The Company is engaged in the sale of smartphones and enterprise software and services. The Company’s products and services include Enterprise Solutions and Services, Devices, BlackBerry Technology Solutions and Messaging. It is engaged in providing enterprise mobility management (EMM) and mobile security, and offers a portfolio of enterprise software solutions and services that can be deployed across a range of ecosystems and devices, including BlackBerry Enterprise Service (BES) 12 and Good Platforms, BES12 Cloud, enterprise file-sync-and-share (EFSS), SecuSUITE for Enterprise, Enhanced subscriber identity module (SIM)-Based Licensing (ESBL), WorkLife by BlackBerry solution and Professional Cybersecurity Services. The BlackBerry Technology Solutions business unit consists of five units: QNX, Certicom, Paratek, the BlackBerry IoT Platform and Intellectual Property and Patent Licensing (IPPL).

About China Telecom

China Telecom Corporation Limited is an investment holding company principally engaged in telecommunications and related businesses. The Company provides integrated information services, including wireline and mobile telecommunications services, Internet access services, information services and other value-added telecommunications services. The Company mainly operates its business in domestic market.

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