Head-To-Head Analysis: Tencent (TCEHY) vs. Donnelley Financial Solns (DFIN)

Tencent (OTCMKTS: TCEHY) and Donnelley Financial Solns (NYSE:DFIN) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Analyst Recommendations

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This is a breakdown of current ratings and price targets for Tencent and Donnelley Financial Solns, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tencent 0 0 4 0 3.00
Donnelley Financial Solns 0 3 1 0 2.25

Tencent currently has a consensus price target of $63.00, suggesting a potential upside of 24.73%. Donnelley Financial Solns has a consensus price target of $23.33, suggesting a potential upside of 27.43%. Given Donnelley Financial Solns’ higher possible upside, analysts plainly believe Donnelley Financial Solns is more favorable than Tencent.

Volatility and Risk

Tencent has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Donnelley Financial Solns has a beta of 2.42, suggesting that its stock price is 142% more volatile than the S&P 500.

Valuation and Earnings

This table compares Tencent and Donnelley Financial Solns’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tencent $36.39 billion 13.19 $10.94 billion $0.94 53.73
Donnelley Financial Solns $1.00 billion 0.62 $9.70 million $0.96 19.07

Tencent has higher revenue and earnings than Donnelley Financial Solns. Donnelley Financial Solns is trading at a lower price-to-earnings ratio than Tencent, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

0.3% of Tencent shares are owned by institutional investors. Comparatively, 89.2% of Donnelley Financial Solns shares are owned by institutional investors. 1.6% of Donnelley Financial Solns shares are owned by 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

Tencent pays an annual dividend of $0.07 per share and has a dividend yield of 0.1%. Donnelley Financial Solns does not pay a dividend. Tencent pays out 7.4% of its earnings in the form of a dividend.

Profitability

This table compares Tencent and Donnelley Financial Solns’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tencent 30.08% 26.08% 12.48%
Donnelley Financial Solns 0.97% 27.42% 4.41%

Summary

Tencent beats Donnelley Financial Solns on 9 of the 16 factors compared between the two stocks.

Tencent Company Profile

Tencent Holdings Limited, an investment holding company, provides Internet value-added services (VAS) and online advertising services in Mainland China, Hong Kong, North America, Europe, other Asian countries, and internationally. The company operates through VAS, Online Advertising, and Others segments. It offers online/mobile games, community VAS, and applications across various Internet and mobile platforms; instant messaging services; and online literature services. The company's online advertising services include display advertising; and delivery of pay-for click, pay-for download, or pay-for instant display advertisements. The company also provides payment related, cloud, and other services. In addition, it is involved in the development of software and provision of information technology services; asset management business; design and production of advertisement; development and operation of online games; and provision of online music entertainment services. Tencent Holdings Limited has strategic partnerships with Dentsu Aegis Network and Ubisoft. The company was founded in 1998 and is headquartered in Shenzhen, China.

Donnelley Financial Solns Company Profile

Donnelley Financial Solutions, Inc. provides financial communications, and data and analytics services for the investment and capital markets worldwide. It offers communication tools and services to allow its clients to comply with ongoing regulatory filings; and communications services to create, manage, and deliver registration statements, prospectuses, proxies, and other communications to regulators and investors. The company also provides virtual data rooms to facilitate the deal management requirements of capital markets, and mergers and acquisitions transactions; and data and analytics services that help professionals uncover intelligence from financial disclosure contained within public filings made with the Securities and Exchange Commission. In addition, it offers language solutions, including translation, editing, interpreting, proof-reading, and multilingual typesetting; and specialized content services, such as transcreation, copywriting, linguistic validation by subject matter experts, transcription, voice-over, subtitling, and localization, as well as application testing and quality assurance. The company serves global capital markets compliance and transaction needs for its corporate clients and their advisors, such as law firms and investment bankers; and investment management compliance and analytics needs for mutual fund companies, variable annuity providers, and broker/dealers. Donnelley Financial Solutions, Inc. is based in Chicago, Illinois.

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