Alphabet (NASDAQ:GOOGL – Get Free Report) and Snap (NYSE:SNAP – Get Free Report) are both communication services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
Institutional and Insider Ownership
40.0% of Alphabet shares are held by institutional investors. Comparatively, 47.5% of Snap shares are held by institutional investors. 11.6% of Alphabet shares are held by company insiders. Comparatively, 22.7% of Snap shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Alphabet and Snap”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Alphabet | $402.84 billion | 9.12 | $132.17 billion | $19.16 | 15.59 |
| Snap | $5.93 billion | 1.49 | -$460.49 million | ($0.09) | -58.02 |
Alphabet has higher revenue and earnings than Snap. Snap is trading at a lower price-to-earnings ratio than Alphabet, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings and target prices for Alphabet and Snap, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alphabet | 0 | 5 | 45 | 5 | 3.00 |
| Snap | 2 | 23 | 11 | 1 | 2.30 |
Alphabet currently has a consensus target price of $412.51, suggesting a potential upside of 38.10%. Snap has a consensus target price of $7.31, suggesting a potential upside of 39.95%. Given Snap’s higher possible upside, analysts plainly believe Snap is more favorable than Alphabet.
Profitability
This table compares Alphabet and Snap’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alphabet | 50.03% | 43.33% | 29.24% |
| Snap | -2.30% | -7.10% | -2.00% |
Risk and Volatility
Alphabet has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Snap has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.
Summary
Alphabet beats Snap on 10 of the 13 factors compared between the two stocks.
About Alphabet
Alphabet Inc. is a technology holding company whose largest business is Google. Founded in 1998 by Larry Page and Sergey Brin, Google became part of Alphabet when the company reorganized its businesses under the holding-company structure in 2015. Google’s products and services include Search, YouTube, Android, Chrome, Google Maps, Google Play and Google Cloud. The company also generates revenue from digital advertising and offers devices, subscriptions and artificial intelligence products and services.
About Snap
Snap Inc. is a technology company best known for Snapchat, a mobile application for visual communication. The company’s products and services help people share photos and videos, message friends, and explore content from creators and publishers. Snapchat features include Stories, Spotlight for short-form video, Snap Map, and augmented reality tools such as interactive Lenses. Snap also provides advertising solutions to businesses and develops camera-related products and services, including its Spectacles smart glasses and Snap AR platform.
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