Sohu.com (NASDAQ:SOHU – Get Free Report) and Tencent (OTCMKTS:TCEHY – Get Free Report) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.
Profitability
This table compares Sohu.com and Tencent’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sohu.com | 22.70% | -6.37% | -3.74% |
| Tencent | 29.55% | 19.06% | 11.17% |
Earnings & Valuation
This table compares Sohu.com and Tencent”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sohu.com | $594.65 million | 0.72 | -$100.27 million | $4.17 | 3.43 |
| Tencent | $91.85 billion | 8.16 | $27.00 billion | $3.25 | 25.19 |
Tencent has higher revenue and earnings than Sohu.com. Sohu.com is trading at a lower price-to-earnings ratio than Tencent, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
33.0% of Sohu.com shares are held by institutional investors. Comparatively, 0.0% of Tencent shares are held by institutional investors. 21.1% of Sohu.com shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Sohu.com and Tencent, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sohu.com | 0 | 1 | 1 | 0 | 2.50 |
| Tencent | 0 | 0 | 3 | 0 | 3.00 |
Sohu.com presently has a consensus target price of $20.00, suggesting a potential upside of 39.66%. Tencent has a consensus target price of $102.00, suggesting a potential upside of 24.59%. Given Sohu.com’s higher possible upside, equities analysts plainly believe Sohu.com is more favorable than Tencent.
Volatility & Risk
Sohu.com has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Tencent has a beta of 0.15, indicating that its stock price is 85% less volatile than the S&P 500.
Summary
Tencent beats Sohu.com on 9 of the 14 factors compared between the two stocks.
About Sohu.com
Sohu.com Limited engages in the provision of online media, video, and game products and services on personal computers (PCs) and mobile devices in China. It operates through two segments: Sohu and Changyou. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, as well as ifox, a video application for PC. It also operates Focus (www.focus.cn), which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. In addition, the company offers interactive online games for PCs and mobile devices. Further, it provides paid subscription and interactive broadcasting services. The company was incorporated in 1996 and is headquartered in Beijing, China.
About Tencent
Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. The company's consumers business provides communication and services, such as instant messaging and social network; digital content including online games, videos, live streaming, news, music, and literature; fintech services, which includes mobile payment, wealth management, loans, and securities trading; and various tools, such as network security management, browser, navigation, application management, email, etc. Its enterprise business comprises marketing solutions, which offers digital tools including user insight, creative management, placement strategy, and digital assets management; and cloud services, such as cloud computing, big data analytics, artificial intelligence, Internet of Things, security and other technologies for financial services, education, healthcare, retail, industry, transport, energy, and radio & television application. In addition, the company operates innovation business, which includes artificial intelligences; and discover and develops enterprise and next-generation technologies for food production, energy, and water management application. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People's Republic of China.
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