NetEase (NASDAQ: NTES) and Gartner (NYSE:IT) are both large-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.
Risk & Volatility
NetEase has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Gartner has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for NetEase and Gartner, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NetEase currently has a consensus price target of $347.00, suggesting a potential upside of 4.68%. Gartner has a consensus price target of $126.89, suggesting a potential downside of 8.35%. Given NetEase’s higher probable upside, equities analysts clearly believe NetEase is more favorable than Gartner.
This table compares NetEase and Gartner’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares NetEase and Gartner’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NetEase||$5.50 billion||7.96||$1.67 billion||$14.47||22.91|
|Gartner||$2.44 billion||5.13||$193.58 million||($0.34)||-407.21|
NetEase has higher revenue and earnings than Gartner. Gartner is trading at a lower price-to-earnings ratio than NetEase, indicating that it is currently the more affordable of the two stocks.
NetEase pays an annual dividend of $3.63 per share and has a dividend yield of 1.1%. Gartner does not pay a dividend. NetEase pays out 25.1% of its earnings in the form of a dividend.
Institutional and Insider Ownership
49.4% of NetEase shares are held by institutional investors. Comparatively, 95.4% of Gartner shares are held by institutional investors. 54.7% of NetEase shares are held by company insiders. Comparatively, 4.3% of Gartner shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
NetEase beats Gartner on 11 of the 17 factors compared between the two stocks.
NetEase, Inc. (NetEase) is a technology company. The Company operates an interactive online community in China and is a provider of Chinese language content and services through its online games, Internet media, e-mail, e-commerce and other businesses. The Company operates through three segments: Online Game Services; Advertising Services, and E-mail, E-commerce and Others. Its online games business primarily focuses on offering personal computer (PC)-client massively multi-player online role-playing games (PC-client MMORPGs), as well as mobile games to the Chinese market. The NetEase Websites provide Internet users with Chinese language online services centered over three core service categories, which include content, community and communication. Its online advertising offerings include banner advertising, direct e-mail, sponsored special events, games, contests and other activities. It offers free and fee-based premium e-mail services to its individual users and corporate users.
Gartner, Inc. is an information technology research and advisory company. The Company works with clients to research, analyze and interpret the business of information technology (IT), supply chain and marketing within the context of their individual roles. It operates in three segments: Research, Consulting and Events. Research segment consists of subscription-based research products, access to research inquiry, peer networking services and membership programs. Consulting segment consists of consulting, measurement engagements and strategic advisory services. Events segment consists of various symposia, conferences and exhibitions. It provides insight through reports, briefings, tools, access to its analysts, peer networking services and membership programs that enable its clients to make decisions about their IT, supply chain and digital marketing initiatives. Its consultants provide fact-based consulting services to help clients use and manage IT to optimize business performance.
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