Tencent Music Entertainment Group (NYSE:TME) versus Paramount Global (NASDAQ:PARA) Financial Contrast

Tencent Music Entertainment Group (NYSE:TME) and Paramount Global (NASDAQ:PARA) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Dividends

Tencent Music Entertainment Group pays an annual dividend of $0.17 per share and has a dividend yield of 0.7%. Paramount Global pays an annual dividend of $0.20 per share and has a dividend yield of 1.8%. Tencent Music Entertainment Group pays out 18.7% of its earnings in the form of a dividend. Paramount Global pays out -666.7% 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. Paramount Global has increased its dividend for 1 consecutive years. Paramount Global is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Tencent Music Entertainment Group and Paramount Global”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tencent Music Entertainment Group	$3.89 billion	10.82	$924.18 million	$0.91	26.96
Paramount Global	$28.76 billion	0.26	-$6.19 billion	($0.03)	-368.00

Tencent Music Entertainment Group has higher earnings, but lower revenue than Paramount Global. Paramount Global is trading at a lower price-to-earnings ratio than Tencent Music Entertainment Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Tencent Music Entertainment Group and Paramount Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tencent Music Entertainment Group	33.72%	10.75%	8.39%
Paramount Global	-0.05%	4.51%	1.68%

Institutional & Insider Ownership

24.3% of Tencent Music Entertainment Group shares are owned by institutional investors. Comparatively, 73.0% of Paramount Global shares are owned by institutional investors. 0.4% of Paramount Global shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Tencent Music Entertainment Group has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Paramount Global has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Tencent Music Entertainment Group and Paramount Global, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tencent Music Entertainment Group	0	0	9	2	3.18
Paramount Global	7	3	2	0	1.58

Tencent Music Entertainment Group presently has a consensus price target of $24.47, suggesting a potential downside of 0.27%. Paramount Global has a consensus price target of $11.70, suggesting a potential upside of 5.98%. Given Paramount Global’s higher probable upside, analysts clearly believe Paramount Global is more favorable than Tencent Music Entertainment Group.

Summary

Tencent Music Entertainment Group beats Paramount Global on 10 of the 18 factors compared between the two stocks.

About Tencent Music Entertainment Group

Tencent Music Entertainment Group operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services in the People's Republic of China. It offers QQ Music, Kugou Music, and Kuwo Music that enable users to discover music in personalized ways; long-form audio content, including audiobooks, podcasts and talk shows, as well as music-oriented video content comprising music videos, live performances, and short videos; and WeSing, which enables users to sing along from its library of karaoke songs and share their performances in audio or video formats with friends. The company also delivers music-centric live streaming services primarily through the Live Streaming tab on QQ Music, Kugou Music, Kuwo Music, WeSing, Kugou Live, and Kuwo Live that provides an interactive online stage for performers and users to showcase their talent and engage with a diverse audience base; and Lazy Audio, an audio platform. In addition, it sells music-related merchandise; and artist-related merchandise, such as branded apparel, posters and art prints, and accessories and integrated and technology-driven music solutions that help IoT device manufacturers build and operate their branded music services on their IoT devices, as well as offers advertising services across its online karaoke platform and online music apps. The company is headquartered in Shenzhen, China. Tencent Music Entertainment Group is a subsidiary of Tencent Holdings Limited.

About Paramount Global

Paramount Global operates as a media, streaming, and entertainment company worldwide. It operates through TV Media, Direct-to-Consumer, and Filmed Entertainment segments. The TV Media segment operates CBS Television Network, a domestic broadcast television network; CBS Stations, a television station; and international free-to-air networks comprising Network 10, Channel 5, Telefe, and Chilevisión; domestic premium and basic cable networks, such as Paramount+ with Showtime, MTV, Comedy Central, Paramount Network, The Smithsonian Channel, Nickelodeon, BET Media Group, and CBS Sports Network; and international extensions of these brands. This segment also offers domestic and international television studio operations, including CBS Studios, Paramount Television Studios, and Showtime/MTV Entertainment Studios; CBS Media Ventures, which produces and distributes first-run syndicated programming; and digital properties consisting of CBS News Streaming and CBS Sports HQ. The Direct-to-Consumer segment provides a portfolio of domestic and international pay and free streaming services, including Paramount+, Pluto TV, BET+, and Noggin. The Filmed Entertainment segment produces and acquires films, series, and short-form content for release and licensing around the world, including in theaters, on streaming services, on television, through digital home entertainment, and DVDs/Blu-rays; and operates a portfolio consisting of Paramount Pictures, Paramount Players, Paramount Animation, Nickelodeon Studio, Awesomeness, and Miramax. It also offers production, distribution, and advertising solutions. The company was formerly known as ViacomCBS Inc. and changed its name to Paramount Global in February 2022. The company was founded in 1914 and is headquartered in New York, New York. Paramount Global is a subsidiary of National Amusements, Inc.