Critical Review: Kakaku.com (OTCMKTS:KKKUF) vs. JOYY (NASDAQ:JOYY)

JOYY (NASDAQ:JOYY) and Kakaku.com (OTCMKTS:KKKUF) are both communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Profitability

This table compares JOYY and Kakaku.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JOYY	10.42%	3.67%	3.20%
Kakaku.com	N/A	N/A	N/A

Dividends

JOYY pays an annual dividend of $5.98 per share and has a dividend yield of 8.0%. Kakaku.com pays an annual dividend of $9.96 per share and has a dividend yield of 43.9%. JOYY pays out 138.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kakaku.com pays out 23.1% of its earnings in the form of a dividend. Kakaku.com is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares JOYY and Kakaku.com”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JOYY	$2.12 billion	1.76	$2.10 billion	$4.31	17.40
Kakaku.com	N/A	N/A	N/A	$43.08	0.53

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

Insider and Institutional Ownership

36.8% of JOYY shares are held by institutional investors. Comparatively, 24.1% of Kakaku.com shares are held by institutional investors. 43.0% of JOYY shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for JOYY and Kakaku.com, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JOYY	0	2	3	0	2.60
Kakaku.com	0	0	0	0	0.00

JOYY currently has a consensus price target of $80.50, indicating a potential upside of 7.33%. Given JOYY’s stronger consensus rating and higher possible upside, equities analysts plainly believe JOYY is more favorable than Kakaku.com.

Summary

JOYY beats Kakaku.com on 10 of the 13 factors compared between the two stocks.

About JOYY

JOYY Inc., through its subsidiaries, operates social media platforms that offer users engaging and experience across various video and audio-based social platforms. The company operates Bigo Live, a live streaming platform that allows users to live stream specific moments, such as live talk with other users, make video calls, and watch trend videos; Likee, a short-form video social platform that focuses on enabling users to create short-form video; Hago, a casual game-oriented social platform; and imo, a chat and instant messaging application with functions, including video calls, text messages, and photo and video sharing. It operates in the People’s Republic of China, the United States, the Great Britain, Japan, South Korea, Australia, the Middle East, and Southeast Asia and others. The company was formerly known as YY Inc. and changed its name to JOYY Inc. in December 2019. JOYY Inc. was founded in 2005 and is headquartered in Singapore.

About Kakaku.com

Kakaku.com, Inc., together with its subsidiaries, engages in the provision of purchase support, restaurant review, and other services in Japan. The company operates Kakaku.com, that provides prices, specifications, and user reviews, on various products and services, such as computers, home appliances, smartphones, interiors, fashion, internet providers, and insurances; and Tabelog.com, a restaurant discovery and reservation site. It also operates Kyujin box and Jobcube, job classified websites; Sumaity, a residential real estate website; 4 travel, a travel review and comparison site; icotto, an online travel Information media site; Bus Hikaku Navi, a price comparison site for highway/overnight buses and bus tours; Low price trips, a price comparison site for domestic travel and overseas airline tickets; and Bus Trip, an online media on highway busses and bus tours. In addition, the company operates kinarino, a lifestyle media; TASCLAP an online media for men's fashion; Pathee, a shopping spot information site; eiga.com, an online database for movies and showtimes; Akiba-souken, an animation and Akihabara culture information media; PHOTOHITO, a photo sharing community site; webCG, an online media for car enthusiasts; and FX-rashinban, a FX related information, commentary, and forecast site on foreign exchange market. Kakaku.com, Inc. was incorporated in 1997 and is headquartered in Tokyo, Japan.