Alphabet (NASDAQ:GOOGL) and JOYY (NASDAQ:YY) Critical Analysis

JOYY (NASDAQ:YY) and Alphabet (NASDAQ:GOOGL) are both communication services companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Analyst Ratings

This is a summary of current ratings and target prices for JOYY and Alphabet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JOYY	0	0	2	0	3.00
Alphabet	0	4	44	6	3.04

JOYY currently has a consensus price target of $66.00, indicating a potential downside of 10.79%. Alphabet has a consensus price target of $419.86, indicating a potential upside of 11.18%. Given Alphabet’s stronger consensus rating and higher probable upside, analysts clearly believe Alphabet is more favorable than JOYY.

Risk and Volatility

JOYY has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500. Comparatively, Alphabet has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Profitability

This table compares JOYY and Alphabet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JOYY	9.02%	4.64%	2.96%
Alphabet	54.77%	51.32%	35.42%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JOYY	$2.24 billion	1.78	$301.82 million	($3.10)	-23.86
Alphabet	$402.84 billion	11.47	$132.17 billion	$19.91	18.97

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

Insider & Institutional Ownership

36.8% of JOYY shares are held by institutional investors. Comparatively, 40.0% of Alphabet shares are held by institutional investors. 43.0% of JOYY shares are held by insiders. Comparatively, 11.6% of Alphabet shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

JOYY pays an annual dividend of $3.72 per share and has a dividend yield of 5.0%. Alphabet pays an annual dividend of $0.88 per share and has a dividend yield of 0.2%. JOYY pays out -120.0% of its earnings in the form of a dividend. Alphabet pays out 4.4% 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. Alphabet has raised its dividend for 1 consecutive years. JOYY is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Alphabet beats JOYY on 14 of the 18 factors compared between the two stocks.

About JOYY

JOYY Inc., together with its subsidiaries, operates social media platforms that offer users engaging and experience across various video-based social platforms. It operates through two segments, BIGO and All Other. The company operates Bigo Live, a social live streaming platform, that provides an interactive online stage for users to host and watch live streaming sessions, share their life moments, showcase their talents, and interact with people worldwide; Likee, a short-form video social platform, which enables users to discover, create, and share short videos, with video creation tools and personalized feeds; imo, an instant messenger platform, that provides audio and video communication services; Hago, a social networking platform that offers casual games integrating social features, such as audio and video multi-user chatrooms and 3D virtual interactive party games; and Shopline, a smart commerce platform, that provides solutions and services to enable merchants in creating and growing their brands online and reach customers through various sales channels, including e-commerce platforms, social commerce, and physical retail stores. It operates in the People's Republic of China, the United States, the Great Britain, Japan, South Korea, Australia, the Middle East, Southeast Asia, and internationally. The company was formerly known as YY Inc. and changed its name to JOYY Inc. in December 2019. JOYY Inc. was founded in 2005 and is headquartered in Singapore.

About Alphabet

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.