International telecom companies versus US companies
Telecom stocks in the wireless telecommunications subsector that is part of the SPDR S&P International Telecommunications Sector ETF (IST) generated impressive average TTM (trailing 12-month) returns of 17.96%. In comparison, stocks in the iShares U.S. Telecommunications ETF (IYZ) generated average returns of -0.41% during the same period.
Freenet Group, KDDI, NTT Docomo, and Drillisch Telecom, each part of IST, generated TTM returns of 50.49%, 49.61%, 37.07%, and 28.57%, respectively. In contrast, US telecom firms T-Mobile (TMUS) and SBA Communications (SBAC) posted TTM returns of 18.97% and 16.16%, respectively. U.S. Cellular (USM) and Sprint (S) posted respective returns of -5.95% and -50.65% during the same period.
Ratio analysis: US telecom stocks
In the above chart, we can see that T-Mobile’s stock price has increased due to substantial revenue growth. The firm’s revenues grew by 4.1% over the last 12 months. And EBITDA (earnings before interest, taxes, depreciation, and amortization) and EBIT margins also increased considerably, by 19.1% and 130.1%, respectively. T-Mobile constitutes 0.05% of the iShares Russell 3000 ETF (IWV).
Sprint’s revenues fell by 14.8%, and a massive fall in stock price followed. The firm’s EBITDA and EBIT margins came in at -26.9% and -37.8%, respectively, in the TTM period.
Ratio analysis: International telecom stocks
Freenet Group saw sales fall by 4.78% in the TTM period. Earnings per share increased by 3.57%, and EBITDA and EBIT margins increased as well, by over 11.91% and 15.6%, respectively. The firm’s return on investment was 12.69% below the industry average of 16.88%, but its return on equity was 18.67%, marginally higher than the industry average of 18.52%.