Tencent (OTCMKTS:TCEHY) vs. Reddit (NYSE:RDDT) Head to Head Comparison

Reddit (NYSE:RDDT) and Tencent (OTCMKTS:TCEHY) are both large-cap communication services companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reddit	$2.20 billion	13.29	$529.72 million	$4.30	35.37
Tencent	$104.58 billion	4.87	$31.28 billion	$3.65	15.32

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

Insider & Institutional Ownership

0.0% of Tencent shares are owned by institutional investors. 28.5% of Reddit shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Reddit has a beta of 2.02, suggesting that its stock price is 102% more volatile than the S&P 500. Comparatively, Tencent has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Reddit and Tencent, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	0	12	17	2	2.68
Tencent	1	1	2	0	2.25

Reddit presently has a consensus price target of $219.29, indicating a potential upside of 44.19%. Tencent has a consensus price target of $106.00, indicating a potential upside of 89.59%. Given Tencent’s higher probable upside, analysts plainly believe Tencent is more favorable than Reddit.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Reddit	31.35%	29.02%	26.32%
Tencent	29.83%	19.83%	11.76%

Summary

Reddit beats Tencent on 11 of the 15 factors compared between the two stocks.

About Reddit

Reddit, Inc. operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another. The company was founded in 2005 and is headquartered in San Francisco, California.

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.