Reviewing Yelp (NYSE:YELP) & Alphabet (NASDAQ:GOOG)

Alphabet (NASDAQ:GOOG) and Yelp (NYSE:YELP) are both communication services companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, institutional ownership, valuation and profitability.

Institutional and Insider Ownership

27.3% of Alphabet shares are owned by institutional investors. Comparatively, 90.1% of Yelp shares are owned by institutional investors. 13.0% of Alphabet shares are owned by insiders. Comparatively, 8.3% of Yelp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Alphabet has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Yelp has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Earnings and Valuation

This table compares Alphabet and Yelp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alphabet	$402.84 billion	10.38	$132.17 billion	$19.91	17.16
Yelp	$1.46 billion	0.87	$145.60 million	$2.09	11.21

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alphabet	54.77%	51.32%	35.42%
Yelp	8.59%	19.52%	13.44%

Analyst Ratings

This is a breakdown of current recommendations for Alphabet and Yelp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alphabet	0	4	30	6	3.05
Yelp	2	4	1	0	1.86

Alphabet presently has a consensus target price of $415.55, indicating a potential upside of 21.59%. Yelp has a consensus target price of $27.57, indicating a potential upside of 17.73%. Given Alphabet’s stronger consensus rating and higher possible upside, equities analysts clearly believe Alphabet is more favorable than Yelp.

Summary

Alphabet beats Yelp on 14 of the 15 factors compared between the two stocks.

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.

About Yelp

Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services. It provides free and paid advertising products to businesses, which include cost-per-click advertising and multi-location Ad products, as well as enables businesses to deliver targeted advertising to large and high-intent audience; and business listing page products. The company also offers other services comprising Yelp Guest Manager, a subscription-based suite of front-of-house management tools for restaurants, nightlife and certain other venues, which include online reservations, a waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as through hostless kiosks, and seating and server rotation management tools; Yelp Knowledge program that offers business owners local analytics and insights through access to its historical data and other proprietary content; and Yelp Fusion, which offers free access to various basic information through publicly available APIs, and paid access to content and data for consumer-facing enterprise use. In addition, it provides content licensing, as well as allows third-party data providers to update and manage business listing information on behalf of businesses. Further, the company offers its products directly through its sales force; indirectly through partners; and online through its website and business app, as well as non-advertising partner arrangements. It has partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery. The company was incorporated in 2004 and is based in San Francisco, California.