Critical Analysis: Inmarsat (IMASY) versus PLDT (PHI)

Inmarsat (OTCMKTS: IMASY) and PLDT (NYSE:PHI) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

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0.0% of Inmarsat shares are held by institutional investors. Comparatively, 8.9% of PLDT shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Inmarsat pays an annual dividend of $0.48 per share and has a dividend yield of 9.1%. PLDT pays an annual dividend of $0.67 per share and has a dividend yield of 2.4%. Inmarsat pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PLDT pays out 24.7% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Inmarsat and PLDT’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inmarsat $1.40 billion 1.74 $181.70 million $0.64 8.28
PLDT $3.17 billion 1.94 $264.74 million $2.71 10.52

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Inmarsat and PLDT, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inmarsat 0 5 0 0 2.00
PLDT 1 4 3 0 2.25

Profitability

This table compares Inmarsat and PLDT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inmarsat 12.98% 15.92% 4.05%
PLDT 8.36% 12.69% 3.17%

Volatility & Risk

Inmarsat has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500. Comparatively, PLDT has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Summary

PLDT beats Inmarsat on 10 of the 14 factors compared between the two stocks.

About Inmarsat

Inmarsat plc provides mobile satellite communications services on land, at sea, and in the air worldwide. The company operates through five segments: Maritime, US Government, Enterprise, Aviation, and Global Government. It offers voice and data broadband services; global maritime distress and safety system services; mobile and fixed voice services; a portfolio of machine-to-machine services that provide two-way data connectivity for messaging, tracking, and monitoring of fixed or mobile assets; maritime satellite services, including very small aperture terminals and television receive only antenna services; and Global Xpress, a high-speed broadband service that offer seamless connectivity for advanced data services on land, at sea, and in the air. The company also offers in-flight voice, data, safety, and cabin connectivity services for business and commercial air transport. It connects to its fleet of 12 satellites using a range of equipment, including global handheld satellite phones and notebook-size broadband Internet devices, as well as specialist terminals and antennas fitted to ships, aircraft, and road vehicles. It serves governments, airlines, the broadcast media industry, the oil and gas industry, the mining and construction industry, and humanitarian aid agencies. The company has a strategic partnership with Deutsche Telekom AG to develop the European Aviation Network to combine satellite connectivity from Inmarsat’s S-band satellite with an LTE-based ground network. The company was founded in 1979 and is headquartered in London, the United Kingdom.

About PLDT

PLDT Inc. provides telecommunications services in the Philippines. The company's Wireless segment offers cellular mobile, Internet broadband distribution, operations support services, mobile applications and digital platforms development, mobile payment, solutions and systems integration, satellite communications, and satellite information and messaging services. This segment also sells WiFi access equipment; develops financial technology solutions; offers insurance products; and operates as a content provider. As of December 31, 2016, it serves 62,763,209 subscribers. Its Fixed Line segment provides fixed line telecommunication services, such as local exchange, international long distance, national long distance, and data and miscellaneous services to retail, corporate, and small and medium sized enterprises. This segment also offers information and communications technology, infrastructure, and services for Internet applications; Internet protocol-based solutions and multimedia content delivery services; and business infrastructure and solutions, intelligent data processing and implementation services, and data analytics insight. In addition, it distributes Filipino channels and content services; and provides bills printing and other value-added services. Further, this segment provides data and network services; managed information technology (IT) outsourcing; Internet-based purchasing, IT consulting, and professional services; and gaming support services, as well as engages in air transportation business. As of December 31, 2016, it had 2,438,473 fixed line subscribers. PLDT Inc. has a strategic partnership with Rocket Internet SE to develop online and mobile payment solutions in emerging markets. The company was formerly known as Philippine Long Distance Telephone Company and changed its name to PLDT Inc. in July 2016. PLDT Inc. was founded in 1928 and is based in Makati City, the Philippines.

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