Rakuten (OTCMKTS:RKUNY – Get Free Report) and Match Group (NASDAQ:MTCH – Get Free Report) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.
Valuation and Earnings
This table compares Rakuten and Match Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rakuten | $16.70 billion | 0.53 | -$1.19 billion | ($0.19) | -21.16 |
| Match Group | $3.51 billion | 3.04 | $613.45 million | $2.83 | 16.44 |
Match Group has lower revenue, but higher earnings than Rakuten. Rakuten is trading at a lower price-to-earnings ratio than Match Group, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent recommendations and price targets for Rakuten and Match Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rakuten | 0 | 1 | 0 | 0 | 2.00 |
| Match Group | 0 | 8 | 8 | 0 | 2.50 |
Match Group has a consensus price target of $43.85, indicating a potential downside of 5.77%. Given Match Group’s stronger consensus rating and higher possible upside, analysts clearly believe Match Group is more favorable than Rakuten.
Volatility & Risk
Rakuten has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Match Group has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.
Institutional and Insider Ownership
94.1% of Match Group shares are held by institutional investors. 0.7% of Match Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Dividends
Rakuten pays an annual dividend of $0.02 per share and has a dividend yield of 0.5%. Match Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.7%. Rakuten pays out -10.5% of its earnings in the form of a dividend. Match Group pays out 28.3% 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.
Profitability
This table compares Rakuten and Match Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rakuten | -2.48% | -5.09% | -0.22% |
| Match Group | 20.17% | -324.82% | 17.36% |
Summary
Match Group beats Rakuten on 13 of the 16 factors compared between the two stocks.
About Rakuten
Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Setagaya, Japan.
About Match Group
Match Group, Inc. engages in the provision of dating products. Its portfolio of brands includes Tinder, Hinge, Match, Meetic, OkCupid, Pairs, Plenty Of Fish, Azar, BLK, and Hakuna, as well as a various other brands, each built to increase users' likelihood of connecting with others. Its services are available in over 40 languages to users worldwide. The company was incorporated in 1986 and is based in Dallas, Texas.
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