AT&T (T) versus BT Group (BT) Financial Comparison

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AT&T (NYSE: BT) and BT Group (NYSE:BT) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Earnings & Valuation

This table compares AT&T and BT Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AT&T $160.55 billion 1.26 $29.45 billion $3.05 10.83
BT Group $31.46 billion 0.92 $2.70 billion $1.85 7.85

AT&T has higher revenue and earnings than BT Group. BT Group is trading at a lower price-to-earnings ratio than AT&T, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares AT&T and BT Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AT&T 20.12% 13.64% 4.37%
BT Group 8.64% 32.72% 6.43%

Risk and Volatility

AT&T has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500. Comparatively, BT Group has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Dividends

AT&T pays an annual dividend of $2.00 per share and has a dividend yield of 6.1%. BT Group pays an annual dividend of $1.38 per share and has a dividend yield of 9.5%. AT&T pays out 65.6% of its earnings in the form of a dividend. BT Group pays out 74.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. AT&T has increased its dividend for 33 consecutive years and BT Group has increased its dividend for 6 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for AT&T and BT Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AT&T 2 8 14 0 2.50
BT Group 1 10 5 0 2.25

AT&T presently has a consensus price target of $38.28, suggesting a potential upside of 15.90%. BT Group has a consensus price target of $302.22, suggesting a potential upside of 1,981.42%. Given BT Group’s higher possible upside, analysts clearly believe BT Group is more favorable than AT&T.

Institutional & Insider Ownership

56.1% of AT&T shares are owned by institutional investors. Comparatively, 0.9% of BT Group shares are owned by institutional investors. 0.1% of AT&T shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

AT&T beats BT Group on 12 of the 17 factors compared between the two stocks.

About AT&T

AT&T Inc. provides communications and digital entertainment services. The company operates through four segments: Business Solutions, Entertainment Group, Consumer Mobility, and International. The Business Solutions segment offers wireless services, strategic services, legacy voice, data services, wireless equipment, and other services to multinational companies, governmental and wholesale customers, and individual subscribers. The Entertainment Group segment provides video entertainment and audio programming channels to approximately 25 million subscribers; broadband and Internet services to 13.5 million residential subscribers; local and long-distance voice services to residential customers, as well as DSL Internet access; and voice services provided over IP-based technology. The Consumer Mobility segment offers postpaid and prepaid wireless voice and data communications services to consumers, and wireless wholesale and resale subscribers; consulting, advertising, and application and co-location services; and sells a variety of handsets, wirelessly enabled computers, and personal computer wireless data cards through company-owned stores, agents, or third-party retail stores, as well as accessories, such as carrying cases, hands-free devices, and other items. The International segment offers digital television services, including local and international digital video entertainment and audio programming under the DIRECTV and SKY brands throughout Latin America. This segment offers postpaid and prepaid wireless services in Mexico to approximately 15 million subscribers under the AT&T and Unefon brands; and sells a range of handsets. The company was formerly known as SBC Communications Inc. and changed its name to AT&T Inc. in November 2005. AT&T Inc. was founded in 1983 and is based in Dallas, Texas.

About BT Group

BT Group plc provides communications services worldwide. Its Consumer segment sells telephones, baby monitors, and Wi-Fi extenders through high street retailers, online BT Shop, and Website BT.com; and offers home phone, copper and fiber broadband, TV, and mobile services in various packages. The company's EE segment offers 2G, 3G, and 4G mobile network services; broadband, fixed-voice, and TV services; and postpaid and prepaid plans, and emergency services network. This segment also sells 4G mobile phones, tablets, connected devices, and mobile broadband devices from various manufacturers. Its Business and Public Sector segment provides fixed voice, mobility, fiber and connectivity, and networked IT services to retailers, utilities, public sector, healthcare, sports, construction, finance, and educational sectors. The company's Global Services segment offers business communications and ICT services comprising BT Connect, BT Security, BT One, BT Contact, BT Compute, BT Advise, and BT for financial markets. This segment serves approximately 5,500 customers in 180 countries. Its Wholesale and Ventures segment enables communications providers and other organizations to provide fixed or mobile phone services. Its ventures provide mass-market services, such as directory enquiries and payphones; and enterprise services comprising BT Fleet and BT Redcare. This segment also provides broadband and Ethernet, voice, hosted communication, mobile virtual network operator, managed solutions, machine-to-machine, roaming, and media services. The company's Openreach segment engages in the provision of services over the local access network; and installation and maintenance of fiber and copper communications networks that connect homes and businesses. The company was formerly known as Newgate Telecommunications Limited and changed its name to BT Group plc in September 2001. BT Group plc was incorporated in 2001 and is headquartered in London, the United Kingdom.

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