Alphabet (NASDAQ:GOOG – Get Free Report) and Baidu (NASDAQ:BIDU – Get Free Report) are both large-cap communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.
Insider and Institutional Ownership
27.3% of Alphabet shares are owned by institutional investors. 13.0% of Alphabet shares are owned by insiders. Comparatively, 16.7% of Baidu shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Alphabet and Baidu’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alphabet | 50.03% | 43.33% | 29.24% |
| Baidu | -2.63% | 4.30% | 2.64% |
Earnings & Valuation
This table compares Alphabet and Baidu”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Alphabet | $471.10 billion | 7.22 | $132.17 billion | $19.16 | 14.52 |
| Baidu | $18.46 billion | 1.41 | $799.00 million | ($2.11) | -36.21 |
Alphabet has higher revenue and earnings than Baidu. Baidu is trading at a lower price-to-earnings ratio than Alphabet, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for Alphabet and Baidu, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alphabet | 1 | 5 | 35 | 6 | 2.98 |
| Baidu | 3 | 4 | 12 | 0 | 2.47 |
Alphabet presently has a consensus target price of $413.54, suggesting a potential upside of 48.64%. Baidu has a consensus target price of $144.27, suggesting a potential upside of 88.83%. Given Baidu’s higher possible upside, analysts clearly believe Baidu is more favorable than Alphabet.
Risk & Volatility
Alphabet has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, Baidu has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.
Summary
Alphabet beats Baidu on 13 of the 15 factors compared between the two stocks.
About Alphabet
Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.
About Baidu
Baidu, Inc. engages in the provision of internet search services in China. It operates through two segments: Baidu Core and iQIYI. The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; Baidu Health that helps users to find the doctor and hospital for healthcare needs; and Haokan, a short video app. It also provides Baidu Knows, an online community where users can ask questions to other users; Baidu Wiki; Baidu Experience; Baidu Post; ERNIE Bot, conversational AI bot; Baidu Wenku; Baidu Maps, a voice-enabled mobile app that provides travel-related services; Baidu Drive; Baijiahao; and DuerOS, a smart assistant platform. In addition, it offers online marketing services, which include pay for performance, an auction-based services that allow customers to bid for priority placement of paid sponsored links and reach users who search for information related to their products or services; other marketing services that include display-based marketing services and other online marketing services based on performance criteria other than cost per click; mobile ecosystem, a portfolio of apps, including Baidu App, Haokan, and Baidu Post; various cloud services and solutions, such as platform as a service, software as a service, and infrastructure as a service; self-driving services, including maps, automated valet parking, navigation pilot, electric vehicles, and robotaxi fleets, as well as Xiaodu smart devices. Further, the company provides iQIYI, an online entertainment service, including original and licensed content; other video content and membership; and online advertising services. It has strategic partnership with Zhejiang Geely Holding Group. The company was formerly known as Baidu.com, Inc. Baidu, Inc. was incorporated in 2000 and is headquartered in Beijing, China.
Receive News & Ratings for Alphabet Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Alphabet and related companies with MarketBeat.com's FREE daily email newsletter.
