Comparing Tencent (OTC:TCTZF) & trivago (NASDAQ:TRVG)

Tencent (OTC:TCTZF) and trivago (NASDAQ:TRVG) are both communication services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Earnings and Valuation

This table compares Tencent and trivago”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tencent	N/A	N/A	N/A	$2.34	23.74
trivago	$524.90 million	0.22	-$178.01 million	($2.93)	-0.58

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

Analyst Ratings

This is a summary of current ratings and price targets for Tencent and trivago, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tencent	0	0	0	0	N/A
trivago	0	3	1	0	2.25

trivago has a consensus target price of $2.75, suggesting a potential upside of 62.72%. Given trivago’s higher possible upside, analysts plainly believe trivago is more favorable than Tencent.

Institutional & Insider Ownership

18.3% of Tencent shares are held by institutional investors. Comparatively, 4.5% of trivago shares are held by institutional investors. 6.5% of trivago shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tencent	N/A	N/A	N/A
trivago	-41.42%	1.30%	0.73%

Summary

trivago beats Tencent on 6 of the 10 factors compared between the two stocks.

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.

About trivago

trivago N.V., together with its subsidiaries, operates a hotel and accommodation search platform in the United States, Germany, the United Kingdom, Canada, Japan, and internationally. It offers an online meta-search for hotels and accommodation through online travel agencies, hotel chains, and independent hotels. The company provides travel search for different types of accommodations, such as hotels, vacation rentals, and apartments; and enable advertiser access through website and apps. In addition, it offers access to its platform through various localized websites and apps in various languages. The company was incorporated in 2005 and is headquartered in Düsseldorf, Germany. trivago N.V. operates as a subsidiary of Expedia Lodging Partner Services Sarl.