Critical Contrast: Alibaba Group (BABA) vs. CAPITA Grp/ADR (CTAGY)

Alibaba Group (NYSE:BABA) and CAPITA Grp/ADR (OTCMKTS:CTAGY) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Profitability

This table compares Alibaba Group and CAPITA Grp/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alibaba Group 20.57% 14.18% 8.61%
CAPITA Grp/ADR N/A N/A N/A

Dividends

CAPITA Grp/ADR pays an annual dividend of $0.55 per share and has a dividend yield of 8.0%. Alibaba Group does not pay a dividend. CAPITA Grp/ADR pays out 23.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Alibaba Group and CAPITA Grp/ADR, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alibaba Group 0 0 27 1 3.04
CAPITA Grp/ADR 0 0 1 0 3.00

Alibaba Group presently has a consensus target price of $233.42, suggesting a potential upside of 50.96%. Given Alibaba Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Alibaba Group is more favorable than CAPITA Grp/ADR.

Insider and Institutional Ownership

38.6% of Alibaba Group shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Alibaba Group has a beta of 2.41, indicating that its share price is 141% more volatile than the S&P 500. Comparatively, CAPITA Grp/ADR has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Earnings & Valuation

This table compares Alibaba Group and CAPITA Grp/ADR’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alibaba Group $39.90 billion 9.93 $10.22 billion $4.03 38.37
CAPITA Grp/ADR $5.46 billion 0.21 -$150.91 million $2.35 2.92

Alibaba Group has higher revenue and earnings than CAPITA Grp/ADR. CAPITA Grp/ADR is trading at a lower price-to-earnings ratio than Alibaba Group, indicating that it is currently the more affordable of the two stocks.

Summary

Alibaba Group beats CAPITA Grp/ADR on 15 of the 16 factors compared between the two stocks.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao Marketplace, a mobile commerce destination; Tmall, a third-party platform for brands and retailers; Rural Taobao program that enables rural residents and businesses to sell agricultural products to urban consumers; Juhuasuan, a sales and marketing platform for flash sales; Alibaba.com, an online wholesale marketplace; Alitrip, an online travel booking platform; 1688.com, an online wholesale marketplace; AliExpress, a consumer marketplace; and Hema, a proprietary grocery retail format. The company also provides pay-for-performance and display marketing services through its Alimama marketing technology platform; and Taobao Ad Network and Exchange, a real-time bidding online marketing exchange in China. In addition, it offers cloud computing services, including elastic computing, database, storage and content delivery network, large scale computing, security, and management and application services, as well as big data analytics and a machine learning platform through its Alibaba Cloud Computing platform; Web hosting and domain name registration services; and payment and escrow services, as well as develops and operates mobile Web browsers. The company provides its solutions primarily for businesses. Alibaba Group Holding Limited has strategic collaborations with Driscoll's and Thai Union/Chicken of the Sea to launch their food products to China; and a collaboration agreement with The Hong Kong Polytechnic University. The company was founded in 1999 and is based in Hangzhou, the People's Republic of China.

About CAPITA Grp/ADR

Capita plc provides customer management, administration, and professional support services to clients in the private and public sectors. The company offers business process management, business transformation, corporate and administration, customer management, digital and software solution, financial, HR and recruitment, information technology, legal, procurement, property and infrastructure, start-up development, and travel and event services. Capita plc provides its services to banking and financial services, insurance, life and pensions, retail, telecoms and media, transport, utilities, central and local government, defense, education, emergency services, health, police and justice, and science sectors. The company operates in the United Kingdom, Ireland, the European Union, the Channel Islands, India, South Africa, North America, and the Middle East. The company was formerly known as The Capita Group plc and changed its name to Capita plc in January 2012. Capita plc was founded in 1984 and is headquartered in London, the United Kingdom.

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