NetEase (NTES) vs. Actua (ACTA) Head to Head Review

NetEase (NASDAQ: NTES) and Actua (NASDAQ:ACTA) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, valuation and dividends.

Earnings and Valuation

This table compares NetEase and Actua’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NetEase $5.50 billion 8.12 $1.67 billion $15.20 22.25
Actua $109.30 million 4.76 $70.08 million $2.21 7.19

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

Insider & Institutional Ownership

50.4% of NetEase shares are owned by institutional investors. Comparatively, 72.5% of Actua shares are owned by institutional investors. 54.7% of NetEase shares are owned by insiders. Comparatively, 10.2% of Actua shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

NetEase has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Actua has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.

Dividends

NetEase pays an annual dividend of $3.63 per share and has a dividend yield of 1.1%. Actua does not pay a dividend. NetEase pays out 23.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for NetEase and Actua, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetEase 3 4 7 0 2.29
Actua 0 1 0 0 2.00

NetEase currently has a consensus price target of $325.92, suggesting a potential downside of 3.63%. Actua has a consensus price target of $17.00, suggesting a potential upside of 6.92%. Given Actua’s higher possible upside, analysts clearly believe Actua is more favorable than NetEase.

Profitability

This table compares NetEase and Actua’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NetEase 25.34% 31.84% 21.48%
Actua 67.78% -5.80% -4.62%

Summary

NetEase beats Actua on 11 of the 16 factors compared between the two stocks.

About NetEase

NetEase, Inc. (NetEase) is a technology company. The Company operates an interactive online community in China and is a provider of Chinese language content and services through its online games, Internet media, e-mail, e-commerce and other businesses. The Company operates through three segments: Online Game Services; Advertising Services, and E-mail, E-commerce and Others. Its online games business primarily focuses on offering personal computer (PC)-client massively multi-player online role-playing games (PC-client MMORPGs), as well as mobile games to the Chinese market. The NetEase Websites provide Internet users with Chinese language online services centered over three core service categories, which include content, community and communication. Its online advertising offerings include banner advertising, direct e-mail, sponsored special events, games, contests and other activities. It offers free and fee-based premium e-mail services to its individual users and corporate users.

About Actua

Actua Corporation, formerly ICG Group, Inc., is a multi-vertical cloud technology company. The Company operates through two segments, which include the vertical cloud segment and the vertical cloud (venture) segment. The Company’s vertical cloud-based businesses include Bolt Solutions Inc. (Bolt), Folio Dynamics Holdings Inc. (FolioDynamix), GovDelivery Holdings, Inc. (GovDelivery) and VelocityEHS Holdings, Inc. (VelocityEHS), which operate in the commercial and personal property and casualty insurance, wealth management, government communications and environmental, health and safety (EH&S) markets, respectively. The vertical cloud (venture) businesses include InstaMed Holdings, Inc. (InstaMed) and Parchment Inc. (Parchment), which operate a cloud-based healthcare payments network and an education credentials technology, respectively.

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