Verizon is also involved in transmitting customer data to government agencies, which is leading to reduced new subscriptions. On the other hand, Verizon Communications Inc. (NYSE:VZ) is trying to make its way into Canada, attempting to work out an acquisition. Canada seems to be a lucrative market, which would add value to the company financials if materialized, though a lot of other competitors are trying to reach a mutual understanding with the target firm.
Competition
| Indicators | China Mobile | AT&T | Verizon Communications |
|---|---|---|---|
| Price/Earnings TTM | 10.1 | 27.5 | 128.2 |
| Price/Book | 1.8 | 2.2 | 4.5 |
| Revenue Growth
(3 Yr. average) | 7.4 | 1.3 | 2.4 |
| Net Income Growth
(3 Yr. average) | 3.9 | -15.7 | -47.3 |
| Return on Equity | 18.8 | 7.7 | 3.3 |
| Dividend Yield | 3.79% | 5.03% | 4.04% |
| Current Price | $51.55 | $35.32 | $50.48 |
Data from Morningstar and Financial Visualizations on July 11, 2013
As evident from the financial ratios, China Mobile Ltd. (ADR) (NYSE:CHL) has the highest ROE. Having said that, the company has the greatest revenue and income growth figures, when compared to the negative income figures for AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ).
Despite the low dividend yield, China Mobile is in a better position to provide its customer with the returns, which of course depends on the net income available to the customers. AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) have almost all their ratios far negatively deviated from the industry averages. On the contrary, the figures for China Mobile Ltd. (ADR) (NYSE:CHL) put it in a better position to materialize the returns for its investors.
Finalizing thoughts
I believe that China Mobile is the best bet in this selection. China Mobile Ltd. (ADR) (NYSE:CHL) is serving the world’s largest emerging market, with the largest population coupled with the highest subscribers. This company, though, avoids entering international markets and confines itself to the indigenous home market, is in my opinion a plus for it. Realizing the returns from 4G would greatly enhance China Mobile Ltd. (ADR) (NYSE:CHL)’s financial position. Amid the global economic crunch, the company is well equipped to maintain its current position as well as growth. The company is continuously on a roll with increasing subscriptions, which gives it an edge over the competitors.
Marina Avilkina has no position in any stocks mentioned. The Motley Fool owns shares of China Mobile Ltd. (ADR) (NYSE:CHL).
The article Mobile Operators: Which is the Best Bet for Profits? originally appeared on Fool.com.
Marina is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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