Head to Head Contrast: Groupon (NASDAQ:GRPN) versus SEA (NYSE:SE)

SEA (NYSE:SE) and Groupon (NASDAQ:GRPN) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Insider & Institutional Ownership

59.5% of SEA shares are owned by institutional investors. Comparatively, 90.1% of Groupon shares are owned by institutional investors. 0.2% of SEA shares are owned by insiders. Comparatively, 36.6% of Groupon shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares SEA and Groupon”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SEA	$22.94 billion	2.99	$1.58 billion	$2.59	43.28
Groupon	$497.41 million	1.54	-$83.52 million	($3.11)	-6.07

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

Analyst Recommendations

This is a breakdown of current ratings for SEA and Groupon, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SEA	1	2	8	1	2.75
Groupon	2	1	1	0	1.75

SEA currently has a consensus target price of $149.11, suggesting a potential upside of 33.03%. Groupon has a consensus target price of $26.00, suggesting a potential upside of 37.78%. Given Groupon’s higher probable upside, analysts clearly believe Groupon is more favorable than SEA.

Volatility and Risk

SEA has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, Groupon has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500.

Profitability

This table compares SEA and Groupon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SEA	5.98%	13.54%	5.59%
Groupon	-25.26%	N/A	-20.28%

Summary

SEA beats Groupon on 12 of the 15 factors compared between the two stocks.

About SEA

Sea Ltd. is an internet and mobile platform company, which engages in the provision of online gaming services. It operates through the following segments: Digital Entertainment, E-Commerce, and Digital Financial Services. The Digital Entertainment segment offers and develops mobile and PC online games. The E-Commerce segment manages a third-party marketplace through the Shopee mobile app and websites that connect buyers and sellers. The Digital Financial Services segment includes a variety of payment services and loans to individuals and businesses through SeaMoney. Sea was founded by Xiao Dong Li, Gang Ye, and Jing Ye Chen on May 8, 2009 and is headquartered in Singapore.

About Groupon

Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.