Head to Head Comparison: GungHo Online Entertainment (OTCMKTS:GUNGF) versus NEXON (OTCMKTS:NEXOY)

NEXON (OTCMKTS:NEXOY) and GungHo Online Entertainment (OTCMKTS:GUNGF) are both communication services companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Analyst Ratings

This is a breakdown of current recommendations for NEXON and GungHo Online Entertainment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NEXON	0	2	2	0	2.50
GungHo Online Entertainment	0	0	0	0	0.00

Profitability

This table compares NEXON and GungHo Online Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NEXON	26.37%	12.45%	9.72%
GungHo Online Entertainment	N/A	N/A	N/A

Dividends

NEXON pays an annual dividend of C$0.26 per share and has a dividend yield of 1.4%. GungHo Online Entertainment pays an annual dividend of $199.57 per share and has a dividend yield of 1,263.1%. NEXON pays out 23.4% of its earnings in the form of a dividend. GungHo Online Entertainment pays out 370.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares NEXON and GungHo Online Entertainment”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NEXON	$3.18 billion	4.74	$616.75 million	C$1.11	17.10
GungHo Online Entertainment	N/A	N/A	N/A	$53.82	0.29

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

Insider and Institutional Ownership

2.6% of GungHo Online Entertainment shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

NEXON beats GungHo Online Entertainment on 8 of the 11 factors compared between the two stocks.

About NEXON

NEXON Co., Ltd. produces, develops, and services PC online and mobile games. It operates through five segments: Japan, Korea, China, North America, and Others. The company's PC online game titles include MapleStory, Dungeon & Fighter, and EA SPORTS FIFA ONLINE 4. The company was formerly known as NEXON Japan Co., Ltd. and changed its name to NEXON Co., Ltd. in April 2009. NEXON Co., Ltd. was founded in 1994 and is headquartered in Tokyo, Japan.

About GungHo Online Entertainment

GungHo Online Entertainment, Inc. plans, develops, operates, and distributes smartphone applications, console games, and online computer games. The company was formerly known as ONSale Co., Ltd. and changed its name to GungHo Online Entertainment, Inc. in August 2002. GungHo Online Entertainment, Inc. was incorporated in 1998 and is based in Tokyo, Japan.