Financial Contrast: China Unicom (Hong Kong) (CHU) and Telephone and Data Systems (TDS)

China Unicom (Hong Kong) (NYSE: CHU) and Telephone and Data Systems (NYSE:TDS) are both mid-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Dividends

Telephone and Data Systems pays an annual dividend of $0.62 per share and has a dividend yield of 2.1%. China Unicom (Hong Kong) does not pay a dividend. Telephone and Data Systems pays out 129.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telephone and Data Systems has raised its dividend for 42 consecutive years.

Analyst Ratings

This is a summary of current ratings for China Unicom (Hong Kong) and Telephone and Data Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Unicom (Hong Kong)	4	0	5	0	2.11
Telephone and Data Systems	0	2	0	0	2.00

China Unicom (Hong Kong) currently has a consensus price target of $12.50, indicating a potential downside of 15.82%. Telephone and Data Systems has a consensus price target of $38.00, indicating a potential upside of 28.51%. Given Telephone and Data Systems’ higher probable upside, analysts plainly believe Telephone and Data Systems is more favorable than China Unicom (Hong Kong).

Valuation & Earnings

This table compares China Unicom (Hong Kong) and Telephone and Data Systems’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
China Unicom (Hong Kong)	$40.78 billion	0.87	$11.77 billion	N/A	N/A
Telephone and Data Systems	$5.04 billion	0.65	$934.00 million	$0.48	61.60

China Unicom (Hong Kong) has higher revenue and earnings than Telephone and Data Systems.

Profitability

This table compares China Unicom (Hong Kong) and Telephone and Data Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Unicom (Hong Kong)	N/A	N/A	N/A
Telephone and Data Systems	1.09%	1.15%	0.58%

Volatility & Risk

China Unicom (Hong Kong) has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Telephone and Data Systems has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Insider & Institutional Ownership

1.2% of China Unicom (Hong Kong) shares are owned by institutional investors. Comparatively, 80.3% of Telephone and Data Systems shares are owned by institutional investors. 77.5% of China Unicom (Hong Kong) shares are owned by insiders. Comparatively, 17.3% of Telephone and Data Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Telephone and Data Systems beats China Unicom (Hong Kong) on 8 of the 15 factors compared between the two stocks.

China Unicom (Hong Kong) Company Profile

China Unicom (Hong Kong) Limited is a Hong Kong-based investment holding company principally engaged in the provision of telecommunications services. The Company’s businesses include mobile businesses, fixed-line businesses and others. Its mobile businesses include the provision of call services, roaming services, mobile broadband services, traditional value-added services such as short message services, multimedia message services and wireless Internet access card, as well as new value-added services such as mobile music, mobile television and Wo portal services. Its fixed-line businesses include broadband and Internet networks businesses, among others. The Company’s subsidiaries include CUCL, China Unicom Global Limited and China Unicom (Europe) Operations Limited.

Telephone and Data Systems Company Profile

Telephone and Data Systems, Inc. is a diversified telecommunications company. The Company is engaged in conducting its Wireless operations through its subsidiary, United States Cellular Corporation (U.S. Cellular), as well as providing its wireline services, cable services, and hosted and managed services (HMS), through its subsidiary, TDS Telecommunications Corporation (TDS Telecom). It operates through four business segments: U.S. Cellular, Wireline, Cable, and Hosted and Managed Services. U.S. Cellular provides service to postpaid and prepaid customers. Wireline operations provide retail telecommunications services to both residential and commercial customers. Wireline offers services, including broadband, video, voice and network access services. Cable offers broadband, video and voice services under TDS and BendBroadband brand names. It provides a range of information technology (IT) services, including colocation, and cloud and hosting solutions through its HMS business.