Critical Survey: Booking (NASDAQ:BKNG) versus JD.com (NASDAQ:JD)

Booking (NASDAQ:BKNG) and JD.com (NASDAQ:JD) are both large-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Dividends

Booking pays an annual dividend of $38.40 per share and has a dividend yield of 0.7%. JD.com pays an annual dividend of $0.98 per share and has a dividend yield of 2.9%. Booking pays out 26.7% of its earnings in the form of a dividend. JD.com pays out 27.5% 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. Booking has raised its dividend for 1 consecutive years.

Profitability

This table compares Booking and JD.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Booking	19.23%	-134.19%	24.16%
JD.com	3.06%	13.60%	6.06%

Earnings and Valuation

This table compares Booking and JD.com”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Booking	$23.74 billion	7.02	$5.88 billion	$143.79	35.76
JD.com	$158.76 billion	0.30	$5.67 billion	$3.56	9.48

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Booking and JD.com, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Booking	0	11	19	3	2.76
JD.com	0	5	9	2	2.81

Booking currently has a consensus target price of $5,808.81, suggesting a potential upside of 12.97%. JD.com has a consensus target price of $42.46, suggesting a potential upside of 25.77%. Given JD.com’s stronger consensus rating and higher probable upside, analysts plainly believe JD.com is more favorable than Booking.

Volatility and Risk

Booking has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, JD.com has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500.

Institutional & Insider Ownership

92.4% of Booking shares are owned by institutional investors. Comparatively, 16.0% of JD.com shares are owned by institutional investors. 0.2% of Booking shares are owned by insiders. Comparatively, 16.6% of JD.com shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Booking beats JD.com on 12 of the 18 factors compared between the two stocks.

About Booking

Booking Holdings Inc, formerly The Priceline Group Inc., is a provider of travel and restaurant online reservation and related services. The Company, through its online travel companies (OTCs), connects consumers wishing to make travel reservations with providers of travel services across the world. It offers consumers an array of accommodation reservations (including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties) through its Booking.com, priceline.com and agoda.com brands. Its other brands include KAYAK, Rentalcars.com and OpenTable, Inc. (OpenTable). As of December 31, 2016, Booking.com offered accommodation reservation services for over 1,115,000 properties in over 220 countries and territories on its various Websites and in over 40 languages, which included over 568,000 vacation rental properties (updated property counts were available on the Booking.com Website).

About JD.com

JD.com, Inc. operates as a supply chain-based technology and service provider in the People's Republic of China. The company offers computers, communication, and consumer electronics products, as well as home appliances; and general merchandise products comprising food, beverage and fresh produce, baby and maternity products, furniture and household goods, cosmetics and other personal care items, pharmaceutical and healthcare products, industrial products, books, automobile accessories, apparel and footwear, bags, and jewelry. It also provides online marketplace services for third-party merchants; marketing services; and omni-channel solutions to customers and offline retailers, as well as online healthcare services. In addition, the company develops, owns, and manages its logistics facilities and other real estate properties to support third parties; offers asset management services and integrated service platform; leasing of storage facilities and related management services; and engages in online retail business. Further, it provides integrated data, technology, business, and user management industry solutions to support the digitization of enterprises and institutions; and technology-driven supply chain solutions and logistics services. The company was formerly known as 360buy Jingdong Inc. and changed its name to JD.com, Inc. in January 2014. JD.com, Inc. was incorporated in 2006 and is headquartered in Beijing, the People's Republic of China.