Tencent (OTCMKTS:TCEHY – Get Free Report) and KE (NYSE:BEKE – Get Free Report) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.
Volatility and Risk
Tencent has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500. Comparatively, KE has a beta of -0.36, meaning that its share price is 136% less volatile than the S&P 500.
Dividends
Tencent pays an annual dividend of $0.60 per share and has a dividend yield of 1.0%. KE pays an annual dividend of $0.23 per share and has a dividend yield of 1.4%. Tencent pays out 16.8% of its earnings in the form of a dividend. KE pays out 54.8% 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.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tencent | 0 | 2 | 2 | 0 | 2.50 |
| KE | 0 | 1 | 6 | 0 | 2.86 |
Tencent presently has a consensus target price of $106.00, indicating a potential upside of 83.93%. KE has a consensus target price of $23.07, indicating a potential upside of 44.57%. Given Tencent’s higher possible upside, equities research analysts clearly believe Tencent is more favorable than KE.
Profitability
This table compares Tencent and KE’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tencent | 30.60% | 19.52% | 11.80% |
| KE | 3.77% | 5.47% | 3.10% |
Institutional and Insider Ownership
0.0% of Tencent shares are owned by institutional investors. Comparatively, 39.3% of KE shares are owned by institutional investors. 6.8% of KE shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Tencent and KE”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Tencent | $104.58 billion | 5.02 | $31.28 billion | $3.58 | 16.10 |
| KE | $13.52 billion | 1.32 | $428.13 million | $0.42 | 37.99 |
Tencent has higher revenue and earnings than KE. Tencent is trading at a lower price-to-earnings ratio than KE, indicating that it is currently the more affordable of the two stocks.
Summary
Tencent beats KE on 10 of the 16 factors compared between the two stocks.
About Tencent
Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. The company's consumers business provides communication and services, such as instant messaging and social network; digital content including online games, videos, live streaming, news, music, and literature; fintech services, which includes mobile payment, wealth management, loans, and securities trading; and various tools, such as network security management, browser, navigation, application management, email, etc. Its enterprise business comprises marketing solutions, which offers digital tools including user insight, creative management, placement strategy, and digital assets management; and cloud services, such as cloud computing, big data analytics, artificial intelligence, Internet of Things, security and other technologies for financial services, education, healthcare, retail, industry, transport, energy, and radio & television application. In addition, the company operates innovation business, which includes artificial intelligences; and discover and develops enterprise and next-generation technologies for food production, energy, and water management application. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People's Republic of China.
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.
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