Head to Head Survey: NEXON (OTCMKTS:NEXOY) & HUYA (NYSE:HUYA)

HUYA (NYSE:HUYA) and NEXON (OTCMKTS:NEXOY) are both communication services companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Earnings & Valuation

This table compares HUYA and NEXON”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HUYA	$929.83 million	0.49	-$16.10 million	($0.06)	-33.00
NEXON	$3.18 billion	4.29	$616.75 million	C$1.11	15.70

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

Dividends

HUYA pays an annual dividend of $0.12 per share and has a dividend yield of 6.1%. NEXON pays an annual dividend of C$0.23 per share and has a dividend yield of 1.3%. HUYA pays out -200.0% of its earnings in the form of a dividend. NEXON pays out 20.7% 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. HUYA is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

23.2% of HUYA shares are owned by institutional investors. 1.2% of HUYA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for HUYA and NEXON, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HUYA	1	1	1	1	2.50
NEXON	0	2	2	0	2.50

HUYA presently has a consensus target price of $3.45, suggesting a potential upside of 74.24%. Given HUYA’s higher probable upside, equities research analysts clearly believe HUYA is more favorable than NEXON.

Profitability

This table compares HUYA and NEXON’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HUYA	-1.59%	0.20%	0.14%
NEXON	26.37%	12.56%	9.86%

Summary

NEXON beats HUYA on 9 of the 15 factors compared between the two stocks.

About HUYA

HUYA Inc., together with its subsidiaries, operates game live streaming platforms in the People's Republic of China. Its platforms enable broadcasters and viewers to interact during live streaming. The company's live streaming content also covers other entertainment content, such as talent shows, anime, outdoor activities, live chats, and other genres. In addition, it operates Nimo TV, a game live streaming platform in international markets. Further, the company provides online advertising, cnt, internet value added, and cultural and creative services. The company was founded in 2014 and is headquartered in Guangzhou, China. HUYA Inc. is a subsidiary of Tencent Holdings Limited.

About NEXON

NEXON Co., Ltd. produces, develops, and services PC online and mobile games. It operates through five segments: Japan, Korea, China, North America, and Others. The company's PC online game titles include MapleStory, Dungeon & Fighter, and EA SPORTS FIFA ONLINE 4. The company was formerly known as NEXON Japan Co., Ltd. and changed its name to NEXON Co., Ltd. in April 2009. NEXON Co., Ltd. was founded in 1994 and is headquartered in Tokyo, Japan.