America Movil SAB de CV (ADR) (AMX), Verizon Communications Inc. (VZ): It’s Time to Follow Carlos Slim into his Company

At $19 per share, America Movil is worth around USD $72 billion on the market. The market values America Movil at around 4.9 times EV/EBITDA. Telefonica, at nearly $15 per share, has a total market cap of around USD $66.5 billion. Telefonica is valued a bit higher at 5.21 times EV/EBITDA. Verizon Communication is the biggest company among the three, with nearly USD $139 billion in total market cap. At around $49 per share, Verizon is the most expensive, at 6.2 times EV/EBITDA. Among the three, America Movil is the most profitable company with the highest operating margin at around 20%. Telefonica ranked second with a 16% operating margin while the operating margin of Verizon was only 12%.

Highest potential total yield

Among the three, Telefonica pays shareholders the highest dividend yield: 4.5%. The dividend yields of Verizon Communications Inc. (NYSE:VZ) and America Movil SAB de CV (ADR) (NYSE:AMX) are 4.2% and 1.6%, respectively. Interestingly, as shares kept sliding, the company intended to pay a dividend of 22 centavos (USD $.018 dollar cents) per share and increase its share buyback plan by $40 billion pesos (USD $3.24 billion). The share buyback creates another 4.5% yield for shareholders. Thus, the total yield for America Movil’s shareholders is 6.1%.

The Mexican telecoms regulation bill, if was passed, would definitely affect the long-term performance of America Movil. However, America Movil SAB de CV (ADR) (NYSE:AMX) seems to be quite cheap now, with the lowest EV multiple among its telecommunication peers. In addition, the potential future total yield of 6.1% is quite juicy for investors. With its current market-leading positions in several Latin American markets, America Movil is a buy at its current price.

The article It’s Time to Follow Carlos Slim into his Company originally appeared on Fool.com and is written by Anh HOANG .

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