Tencent (OTCMKTS:TCEHY – Get Free Report) and Cango (NYSE:CANG – Get Free Report) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.
Volatility and Risk
Tencent has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500. Comparatively, Cango has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.
Profitability
This table compares Tencent and Cango’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tencent | 29.87% | 19.47% | 11.52% |
| Cango | -46.40% | 2.40% | 1.43% |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Tencent | $91.85 billion | 7.78 | $27.00 billion | $3.25 | 24.04 |
| Cango | $110.21 million | 1.20 | $41.07 million | ($2.78) | -0.46 |
Tencent has higher revenue and earnings than Cango. Cango is trading at a lower price-to-earnings ratio than Tencent, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations for Tencent and Cango, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tencent | 0 | 0 | 3 | 1 | 3.25 |
| Cango | 1 | 0 | 1 | 0 | 2.00 |
Tencent presently has a consensus price target of $102.00, indicating a potential upside of 30.57%. Cango has a consensus price target of $3.00, indicating a potential upside of 135.29%. Given Cango’s higher probable upside, analysts plainly believe Cango is more favorable than Tencent.
Insider and Institutional Ownership
0.0% of Tencent shares are held by institutional investors. Comparatively, 4.2% of Cango shares are held by institutional investors. 29.1% of Cango shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Tencent beats Cango on 11 of the 15 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 Cango
Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People's Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.
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