NetEase (NASDAQ:NTES) and CDK Global (NASDAQ:CDK) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.
NetEase pays an annual dividend of $4.15 per share and has a dividend yield of 1.5%. CDK Global pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. NetEase pays out 60.4% of its earnings in the form of a dividend. CDK Global pays out 19.1% 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. CDK Global has increased its dividend for 4 consecutive years.
Institutional & Insider Ownership
46.8% of NetEase shares are owned by institutional investors. Comparatively, 81.4% of CDK Global shares are owned by institutional investors. 54.7% of NetEase shares are owned by insiders. Comparatively, 0.5% of CDK Global shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a summary of current ratings and recommmendations for NetEase and CDK Global, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NetEase presently has a consensus price target of $292.68, indicating a potential upside of 8.89%. CDK Global has a consensus price target of $64.67, indicating a potential upside of 39.13%. Given CDK Global’s higher probable upside, analysts clearly believe CDK Global is more favorable than NetEase.
This table compares NetEase and CDK Global’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
NetEase has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, CDK Global has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.
Earnings & Valuation
This table compares NetEase and CDK Global’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NetEase||$9.77 billion||3.52||$930.91 million||$6.87||39.13|
|CDK Global||$1.91 billion||2.94||$124.00 million||$3.14||14.80|
NetEase has higher revenue and earnings than CDK Global. CDK Global is trading at a lower price-to-earnings ratio than NetEase, indicating that it is currently the more affordable of the two stocks.
NetEase beats CDK Global on 11 of the 17 factors compared between the two stocks.
NetEase, Inc. operates an interactive online community in the People's Republic of China. The company operates in four segments: Online Games Services, E-Commerce, Advertising Services, and Innovative Businesses and Other Services. It offers various games in a range of genres through mobile devices and PCs, including role-playing games, MMORPGs, battle arena games, simulation games, collectible card games, first-person shooter games, sandbox games, and other types of games to the Chinese market. The company also operates Kaola that sells imported maternity and baby products, skincare and cosmetics, and other general merchandise; and Yanxuan, which sells its private label products, including apparel, homeware, kitchenware, and other general merchandise. In addition, it operates NetEase News App and NetEase Websites, which provide Internet users with Chinese language-based online services that are centered around content and interactive community. Further, the company provides online advertising services comprising banner advertising, channel sponsorships, direct email, interactive media-rich sites, sponsored special events, games, contests, and other activities. Additionally, it offers online services, such as NetEase CC, a live video streaming platform; NetEase Cloud Music, a music-streaming platform; NetEase Youdao Education, an online platform offering educational content and solutions; EaseRead, an online reading platform; and NetEase Pay, a payment platform, as well as email services to individuals and corporates. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Beijing, the People's Republic of China.
About CDK Global
CDK Global, Inc. provides software and technology solutions for automotive retailers in the United States and internationally. The company operates through Retail Solutions North America, Advertising North America, and CDK International segments. The company offers Dealer Management System (DMS), a portfolio of layered software applications and services for automotive retailers, original equipment manufacturers (OEMs), consumers, and other industry participants manage the acquisition, sale, financing, insuring, parts supply, and repair and maintenance of vehicles. It also provides solutions to retailers and manufacturers of heavy trucks, construction equipment, agricultural equipment, motorcycles, boats, and other marine and recreational vehicles. In addition, the company offers advertising solutions, such as the management of digital advertising spend for automotive retailers, automotive retailer associations, and OEMs; and professional services, custom programming, consulting, implementation, and training solutions, as well as customer support solutions. It serves approximately 28,000 retail locations and OEMs. CDK Global, Inc. is headquartered in Hoffman Estates, Illinois.
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