Playtika (NASDAQ:PLTK – Get Free Report) and Tencent Music Entertainment Group (NYSE:TME – Get Free Report) are both communication services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.
Volatility and Risk
Playtika has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Tencent Music Entertainment Group has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.
Profitability
This table compares Playtika and Tencent Music Entertainment Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Playtika | -9.89% | -65.82% | 6.17% |
| Tencent Music Entertainment Group | 26.27% | 11.53% | 8.87% |
Institutional & Insider Ownership
11.9% of Playtika shares are owned by institutional investors. Comparatively, 24.3% of Tencent Music Entertainment Group shares are owned by institutional investors. 5.7% of Playtika shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Playtika and Tencent Music Entertainment Group”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Playtika | $2.83 billion | 0.28 | -$206.40 million | ($0.73) | -2.89 |
| Tencent Music Entertainment Group | $33.93 billion | 0.40 | $1.54 billion | $0.81 | 10.66 |
Tencent Music Entertainment Group has higher revenue and earnings than Playtika. Playtika 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.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Playtika and Tencent Music Entertainment Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Playtika | 1 | 3 | 2 | 0 | 2.17 |
| Tencent Music Entertainment Group | 0 | 9 | 3 | 1 | 2.38 |
Playtika currently has a consensus price target of $3.67, suggesting a potential upside of 73.78%. Tencent Music Entertainment Group has a consensus price target of $17.21, suggesting a potential upside of 99.29%. Given Tencent Music Entertainment Group’s stronger consensus rating and higher probable upside, analysts clearly believe Tencent Music Entertainment Group is more favorable than Playtika.
Dividends
Playtika pays an annual dividend of $0.40 per share and has a dividend yield of 19.0%. Tencent Music Entertainment Group pays an annual dividend of $0.23 per share and has a dividend yield of 2.7%. Playtika pays out -54.8% of its earnings in the form of a dividend. Tencent Music Entertainment Group pays out 28.4% 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. Playtika is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Tencent Music Entertainment Group beats Playtika on 13 of the 17 factors compared between the two stocks.
About Playtika
Playtika Holding Corp., together with its subsidiaries, develops mobile games in the United States, Europe, Middle East, Africa, Asia pacific, and internationally. The company owns a portfolio of casual and social casino-themed games. It distributes its games to the end customer through various web and mobile platforms and direct-to-consumer platforms. Playtika Holding Corp. was founded in 2010 and is headquartered in Herzliya Pituach, Israel. Playtika Holding Corp. is a subsidiary of Playtika Holding UK II Limited.
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.
Receive News & Ratings for Playtika Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Playtika and related companies with MarketBeat.com's FREE daily email newsletter.
