Critical Review: BCE (NYSE:BCE) versus Chunghwa Telecom (NYSE:CHT)

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

Dividends

BCE pays an annual dividend of $1.27 per share and has a dividend yield of 5.3%. Chunghwa Telecom pays an annual dividend of $1.30 per share and has a dividend yield of 3.0%. BCE pays out 437.9% 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.

Insider & Institutional Ownership

41.5% of BCE shares are owned by institutional investors. Comparatively, 2.1% of Chunghwa Telecom shares are owned by institutional investors. 0.2% of BCE shares are owned by insiders. Comparatively, 1.0% of Chunghwa Telecom shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BCE	1.96%	18.89%	3.74%
Chunghwa Telecom	16.27%	9.72%	7.17%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for BCE and Chunghwa Telecom, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BCE	5	5	4	1	2.07
Chunghwa Telecom	0	1	0	0	2.00

BCE presently has a consensus price target of $33.50, suggesting a potential upside of 40.37%. Given BCE’s stronger consensus rating and higher possible upside, equities analysts plainly believe BCE is more favorable than Chunghwa Telecom.

Earnings and Valuation

This table compares BCE and Chunghwa Telecom”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BCE	$17.82 billion	1.25	$251.05 million	$0.29	82.29
Chunghwa Telecom	$7.16 billion	N/A	$1.13 billion	$1.53	28.65

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

Volatility & Risk

BCE has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Chunghwa Telecom has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500.

Summary

BCE beats Chunghwa Telecom on 10 of the 16 factors compared between the two stocks.

About BCE

BCE Inc., a communications company, provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. The company operates through two segments, Bell Communication and Technology Services, and Bell Media. The Bell Communication and Technology Services segment provides wireless products and services including mobile data and voice plans and devices; wireline products and services comprising data, including internet access, internet protocol television, cloud-based services, and business solutions, as well as voice, and other communication services and products; and satellite TV and connectivity services for residential, small and medium-sized business, government, and large enterprise customers. This segment also buys and sells local telephone, long distance, and data and other services from or to resellers and other carriers; and operates consumer electronics retail stores. The Bell Media segment provides conventional TV, specialty TV, pay TV, streaming services, digital media services, radio broadcasting services, and out-of-home advertising services. BCE Inc. was founded in 1880 and is headquartered in Verdun, Canada.

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.