Head to Head Analysis: Rakuten (OTCMKTS:RKUNY) versus KE (NYSE:BEKE)

KE (NYSE:BEKE) and Rakuten (OTCMKTS:RKUNY) are both large-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Dividends

KE pays an annual dividend of $0.31 per share and has a dividend yield of 1.7%. Rakuten pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. KE pays out 73.8% of its earnings in the form of a dividend. Rakuten pays out -4.0% 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.

Valuation and Earnings

This table compares KE and Rakuten”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KE	$12.80 billion	1.66	$556.89 million	$0.42	44.57
Rakuten	$15.07 billion	0.86	-$1.07 billion	($0.50)	-12.02

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

Volatility and Risk

KE has a beta of -0.63, suggesting that its share price is 163% less volatile than the S&P 500. Comparatively, Rakuten has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for KE and Rakuten, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KE	0	2	5	0	2.71
Rakuten	0	0	0	2	4.00

KE currently has a consensus price target of $23.30, suggesting a potential upside of 24.47%. Given KE’s higher possible upside, analysts plainly believe KE is more favorable than Rakuten.

Institutional & Insider Ownership

39.3% of KE shares are held by institutional investors. 6.8% of KE 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.

Profitability

This table compares KE and Rakuten’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KE	3.37%	5.47%	2.99%
Rakuten	-6.67%	-13.96%	-0.62%

Summary

KE beats Rakuten on 12 of the 17 factors compared between the two stocks.

About KE

KE Holdings Inc., through its subsidiaries, engages in operating an integrated online and offline platform for housing transactions and services in the People's Republic of China. It operates through four segments: Existing Home Transaction Services, New Home Transaction Services, Home Renovation and Furnishing, and Emerging and Other Services. The company operates Beike, an integrated online and offline platform for housing transactions and services; Lianjia, a real estate brokerage branded store; Agent Cooperation Network, an operating system that fosters reciprocity and bonding among various service providers; and software-as-a-service systems. It also owns the Deyou brand for connected brokerage stores; and other brands. In addition, the company offers contract, secure payment, escrow, and other services. KE Holdings Inc. was founded in 2001 and is headquartered in Beijing, the People's Republic of China.

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.