Tencent (OTCMKTS:TCEHY – Get Free Report) is one of 192 publicly-traded companies in the “Interactive Media & Services” industry, but how does it compare to its competitors? We will compare Tencent to related businesses based on the strength of its profitability, institutional ownership, risk, earnings, analyst recommendations, valuation and dividends.
Profitability
This table compares Tencent and its competitors’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tencent | 29.83% | 19.83% | 11.76% |
| Tencent Competitors | -158.05% | -17.17% | 4.08% |
Institutional & Insider Ownership
0.0% of Tencent shares are held by institutional investors. Comparatively, 41.1% of shares of all “Interactive Media & Services” companies are held by institutional investors. 24.0% of shares of all “Interactive Media & Services” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Tencent and its competitors top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Net Income | Price/Earnings Ratio | |
| Tencent | $104.58 billion | $31.28 billion | 14.15 |
| Tencent Competitors | $13.72 billion | $3.48 billion | 8.02 |
Tencent has higher revenue and earnings than its competitors. Tencent is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Tencent and its competitors, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tencent | 0 | 2 | 1 | 0 | 2.33 |
| Tencent Competitors | 1450 | 6038 | 11562 | 443 | 2.56 |
Tencent currently has a consensus target price of $88.00, indicating a potential upside of 70.41%. As a group, “Interactive Media & Services” companies have a potential upside of 30.83%. Given Tencent’s higher possible upside, equities research analysts clearly believe Tencent is more favorable than its competitors.
Dividends
Tencent pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. Tencent pays out 16.4% of its earnings in the form of a dividend. As a group, “Interactive Media & Services” companies pay a dividend yield of 17.7% and pay out 4.9% of their earnings in the form of a dividend. Tencent lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.
Risk & Volatility
Tencent has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500. Comparatively, Tencent’s competitors have a beta of 1.87, suggesting that their average stock price is 87% more volatile than the S&P 500.
Summary
Tencent competitors beat Tencent on 8 of the 15 factors compared.
About Tencent
Tencent Holdings Limited is a technology and entertainment company founded in 1998 and headquartered in Shenzhen, China. It operates internet platforms and services, including Weixin (known internationally as WeChat) and QQ, which offer messaging, social networking, content and other digital services. The company also develops and publishes video games, provides digital content such as music and video, and offers cloud computing and advertising services. Its financial technology activities include payment services through Weixin Pay.
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