Johnson Controls International (JCI) & Tencent (TCEHY) Critical Analysis

Johnson Controls International (NYSE: JCI) and Tencent (OTCMKTS:TCEHY) are both large-cap industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Johnson Controls International and Tencent, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Johnson Controls International 2 8 6 0 2.25
Tencent 0 0 4 0 3.00

Johnson Controls International presently has a consensus target price of $45.00, suggesting a potential upside of 23.25%. Tencent has a consensus target price of $62.00, suggesting a potential upside of 17.77%. Given Johnson Controls International’s higher possible upside, equities analysts plainly believe Johnson Controls International is more favorable than Tencent.

Dividends

Johnson Controls International pays an annual dividend of $1.04 per share and has a dividend yield of 2.8%. Tencent pays an annual dividend of $0.07 per share and has a dividend yield of 0.1%. Johnson Controls International pays out 40.0% of its earnings in the form of a dividend. Tencent pays out 7.4% 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.

Profitability

This table compares Johnson Controls International and Tencent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Johnson Controls International 6.83% 11.60% 4.89%
Tencent 30.08% 24.63% 11.93%

Valuation & Earnings

This table compares Johnson Controls International and Tencent’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Johnson Controls International $30.17 billion 1.12 $1.61 billion $2.60 14.04
Tencent $36.39 billion 13.75 $10.58 billion $0.94 56.01

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

Institutional and Insider Ownership

91.0% of Johnson Controls International shares are owned by institutional investors. Comparatively, 0.4% of Tencent shares are owned by institutional investors. 0.4% of Johnson Controls International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Johnson Controls International has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Tencent has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Summary

Tencent beats Johnson Controls International on 10 of the 16 factors compared between the two stocks.

Johnson Controls International Company Profile

Johnson Controls International plc operates as a diversified technology and multi industrial company worldwide. The company operates through Building Technologies & Solutions and Power Solutions segments. It designs, sells, controls, installs heating, ventilating, and air conditioning systems. The company also provides residential air conditioning and heating systems, and industrial refrigeration products, as well as technical and energy management consulting services. In addition, it designs, sells, installs, services, and monitors electronic security systems, and fire detection and suppression systems; and manufactures and sells intrusion security products, anti-theft devices, breathing apparatus, and access control and video management systems for commercial, industrial, retail, residential, small business, institutional, and governmental customers. Further, the company produces and supplies lead-acid automotive batteries for passenger cars, light trucks, and utility vehicles, as well as advanced battery technologies to power start-stop, hybrid, and electric vehicles. It offers its lead-acid automotive batteries to automotive original equipment manufacturers and the general vehicle battery aftermarket. The company was formerly known as Johnson Controls, Inc. and changed its name to Johnson Controls International plc in September 2016. Johnson Controls International plc was founded in 1885 and is headquartered in Cork, Ireland.

Tencent Company Profile

Tencent Holdings Limited, an investment holding company, provides Internet value-added services (VAS) and online advertising services in Mainland China, Hong Kong, North America, Europe, other Asian countries, and internationally. The company operates through VAS, Online Advertising, and Others segments. It offers online/mobile games, community VAS, and applications across various Internet and mobile platforms; instant messaging services; and online literature services. The company's online advertising services include display advertising; and delivery of pay-for click, pay-for download, or pay-for instant display advertisements. The company also provides payment related, cloud, and other services. In addition, it is involved in the development of software and provision of information technology services; asset management business; design and production of advertisement; development and operation of online games; and provision of online music entertainment services. Tencent Holdings Limited has strategic partnerships with Dentsu Aegis Network and Ubisoft. The company was founded in 1998 and is headquartered in Shenzhen, China.

Receive News & Ratings for Johnson Controls International Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Johnson Controls International and related companies with MarketBeat.com's FREE daily email newsletter.



Leave a Reply