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Alphabet (NASDAQ:GOOGL – Get Free Report) and Autohome (NYSE:ATHM – Get Free Report) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Institutional and Insider Ownership
40.0% of Alphabet shares are owned by institutional investors. Comparatively, 63.1% of Autohome shares are owned by institutional investors. 11.6% of Alphabet shares are owned by company insiders. Comparatively, 5.7% of Autohome shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
Alphabet has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Autohome has a beta of 0.01, indicating that its share price is 99% less volatile than the S&P 500.
Profitability
This table compares Alphabet and Autohome’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alphabet | 31.12% | 34.31% | 24.88% |
| Autohome | 21.74% | 7.10% | 5.66% |
Valuation & Earnings
This table compares Alphabet and Autohome”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Alphabet | $350.02 billion | 8.80 | $100.12 billion | $9.39 | 27.13 |
| Autohome | $964.42 million | 3.52 | $245.52 million | $1.70 | 17.10 |
Alphabet has higher revenue and earnings than Autohome. Autohome is trading at a lower price-to-earnings ratio than Alphabet, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for Alphabet and Autohome, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alphabet | 0 | 10 | 32 | 3 | 2.84 |
| Autohome | 0 | 2 | 1 | 1 | 2.75 |
Alphabet presently has a consensus target price of $225.54, suggesting a potential downside of 11.46%. Autohome has a consensus target price of $36.00, suggesting a potential upside of 23.86%. Given Autohome’s higher probable upside, analysts plainly believe Autohome is more favorable than Alphabet.
Dividends
Alphabet pays an annual dividend of $0.84 per share and has a dividend yield of 0.3%. Autohome pays an annual dividend of $1.13 per share and has a dividend yield of 3.9%. Alphabet pays out 8.9% of its earnings in the form of a dividend. Autohome pays out 66.5% 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. Alphabet has increased its dividend for 1 consecutive years.
Summary
Alphabet beats Autohome on 15 of the 18 factors compared between the two stocks.
About Alphabet
Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.
About Autohome
Autohome Inc. operates as an online destination for automobile consumers in the People’s Republic of China. The company delivers interactive content and tools to automobile consumers through its three websites, autohome.com.cn, che168.com, and ttpai.cn on PCs, mobile devices, mobile applications, and mini apps. It provides media services, including automaker advertising services and regional marketing campaigns; and leads generation services comprising dealer subscription services, advertising services for individual dealers, and used automobile listing and other platform-based services. The company offers Autohome Mall, an online transaction platform; and online bidding platform for used automobiles, as well as collects commissions for facilitating transactions of auto-financing and insurance products on its platform. The company was formerly known as Sequel Limited and changed its name to Autohome Inc. in October 2011. Autohome Inc. was incorporated in 2008 and is headquartered in Beijing, the People’s Republic of China.
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