Head to Head Survey: Telefonica Brasil (NYSE:VIV) versus Chunghwa Telecom (NYSE:CHT)

Telefonica Brasil (NYSE:VIV) and Chunghwa Telecom (NYSE:CHT) are both large-cap utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Institutional and Insider Ownership

5.2% of Telefonica Brasil shares are held by institutional investors. Comparatively, 2.1% of Chunghwa Telecom shares are held by institutional investors. 1.0% of Chunghwa Telecom shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Telefonica Brasil pays an annual dividend of $0.48 per share and has a dividend yield of 4.0%. Chunghwa Telecom pays an annual dividend of $1.30 per share and has a dividend yield of 3.0%. Telefonica Brasil pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chunghwa Telecom pays out 85.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telefonica Brasil is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Telefonica Brasil and Chunghwa Telecom”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telefonica Brasil	$10.36 billion	1.88	$1.03 billion	$0.62	19.35
Chunghwa Telecom	$7.16 billion	N/A	$1.13 billion	$1.53	28.08

Chunghwa Telecom has lower revenue, but higher earnings than Telefonica Brasil. Telefonica Brasil is trading at a lower price-to-earnings ratio than Chunghwa Telecom, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Telefonica Brasil has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Chunghwa Telecom has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Telefonica Brasil and Chunghwa Telecom, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telefonica Brasil	1	4	3	0	2.25
Chunghwa Telecom	0	1	0	0	2.00

Telefonica Brasil presently has a consensus target price of $12.53, suggesting a potential upside of 4.38%. Given Telefonica Brasil’s stronger consensus rating and higher possible upside, research analysts plainly believe Telefonica Brasil is more favorable than Chunghwa Telecom.

Profitability

This table compares Telefonica Brasil and Chunghwa Telecom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telefonica Brasil	10.13%	8.32%	4.56%
Chunghwa Telecom	16.27%	9.72%	7.17%

Summary

Telefonica Brasil beats Chunghwa Telecom on 8 of the 15 factors compared between the two stocks.

About Telefonica Brasil

Telefônica Brasil S.A., together with its subsidiaries, operates as a mobile telecommunications company in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband internet access through 3G, 4G, 4.5G, and 5G, as well as mobile value-added and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through IPTV technologies; network services, such as rental of facilities; other services comprising internet access, private network connectivity, computer equipment leasing, extended service, caller identification, voice mail, cellular blocker, and others; wholesale services, including interconnection services to users of other network providers; and digital services, such as entertainment, cloud, and security and financial services. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices, such as smartphones, broadband USB modems, and other devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, manufacturing, services, financial institutions, government, etc. It markets and sells its solutions through own stores, dealers, retail and distribution channels, door-to-door sales, and outbound tele sales. The company was formerly known as Telecomunicações de São Paulo S.A. – TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil.

About Chunghwa Telecom

Chunghwa Telecom Co., Ltd., together with its subsidiaries, provides telecommunication services in Taiwan and internationally. It operates through Consumer Business, Enterprise Business, International Business, and Others segments. The company offers local, domestic long distance, and international long distance fixed-line telephone services; mobile services such as prepaid and postpaid plans; broadband plans; and internet and data services. Chunghwa Telecom Co., Ltd. was incorporated in 1996 and is headquartered in Taipei City, Taiwan.