Head-To-Head Comparison: Tencent (OTCMKTS:TCEHY) and PCCW (OTCMKTS:PCCWY)

PCCW (OTCMKTS:PCCWY) and Tencent (OTCMKTS:TCEHY) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Analyst Ratings

This is a summary of current ratings and target prices for PCCW and Tencent, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PCCW	0	0	0	0	0.00
Tencent	0	2	2	0	2.50

Tencent has a consensus price target of $102.00, indicating a potential upside of 64.04%. Given Tencent’s stronger consensus rating and higher possible upside, analysts clearly believe Tencent is more favorable than PCCW.

Valuation and Earnings

This table compares PCCW and Tencent”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PCCW	$5.16 billion	1.13	-$32.45 million	N/A	N/A
Tencent	$104.58 billion	5.42	$31.28 billion	$3.38	18.40

Tencent has higher revenue and earnings than PCCW.

Insider & Institutional Ownership

0.0% of Tencent shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

PCCW has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500. Comparatively, Tencent has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

Profitability

This table compares PCCW and Tencent’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PCCW	N/A	N/A	N/A
Tencent	29.92%	19.18%	11.46%

Dividends

PCCW pays an annual dividend of $0.21 per share and has a dividend yield of 2.8%. Tencent pays an annual dividend of $0.50 per share and has a dividend yield of 0.8%. Tencent pays out 14.8% of its earnings in the form of a dividend.

Summary

Tencent beats PCCW on 11 of the 13 factors compared between the two stocks.

About PCCW

PCCW Limited provides telecommunications and related services in Hong Kong, Mainland and other parts of China, Singapore, and internationally. The company's services include local telephony, local data and broadband, mobile, enterprise solutions, international telecommunications, and satellite-based and network-based telecommunications services; outsourcing, consulting, and contact center services; and technical consulting and engineering services. It also provides free television, pay television program, and interactive multimedia services; sells advertising in various telephone directories and on the Internet; publishes directories; sells mobile handsets and accessories; distributes media content; and mobile video on demand and advertising services through OTT platform. In addition, the company offers broadcasting and related services, management and engineering support services, customer relationship management and customer contact management solutions, and media content services; and over-the-top video services under the Viu brand, as well as sells customer premises equipment and related solutions. Further, it engages in the sale, distribution, and marketing of telecommunication products and services; provision of data services; software development, systems integration, consulting, and informatization activities; the provision of computer and IP/IT related value-added services to business customers; operates customer loyalty program and online merchandise sales; and content production, talent management, and entertainment business. Additionally, the company offers e-commerce, travel, insurance, big data analytics, fintech, and health-tech services. PCCW Limited was founded in 1925 and is headquartered in Quarry Bay, Hong Kong.

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.