NetEase (NASDAQ: NTES) and Akamai Technologies (NASDAQ:AKAM) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Earnings & Valuation

This table compares NetEase and Akamai Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NetEase $8.32 billion 4.21 $1.65 billion $12.41 21.46
Akamai Technologies $2.50 billion 5.20 $218.32 million $1.90 40.15

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

Dividends

NetEase pays an annual dividend of $3.00 per share and has a dividend yield of 1.1%. Akamai Technologies does not pay a dividend. NetEase pays out 24.2% of its earnings in the form of a dividend.

Profitability

This table compares NetEase and Akamai Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NetEase 19.64% 24.93% 16.74%
Akamai Technologies 7.46% 10.04% 7.28%

Analyst Ratings

This is a summary of current ratings and target prices for NetEase and Akamai Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetEase 3 3 8 0 2.36
Akamai Technologies 1 9 13 0 2.52

NetEase presently has a consensus price target of $334.85, suggesting a potential upside of 25.72%. Akamai Technologies has a consensus price target of $73.74, suggesting a potential downside of 3.34%. Given NetEase’s higher possible upside, analysts plainly believe NetEase is more favorable than Akamai Technologies.

Institutional and Insider Ownership

51.6% of NetEase shares are held by institutional investors. Comparatively, 89.7% of Akamai Technologies shares are held by institutional investors. 54.7% of NetEase shares are held by insiders. Comparatively, 3.2% of Akamai Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

NetEase has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Akamai Technologies has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Summary

NetEase beats Akamai Technologies on 10 of the 16 factors compared between the two stocks.

About NetEase

NetEase, Inc. operates an interactive online community in the People's Republic of China. The company operates through Online Game Services; Advertising Services; and E-mail, E-commerce and Others segments. It offers PC-client massively multi-player online role-playing games and mobile games; and distributes its point cards to gamers. The company's NetEase Websites provide Chinese Internet users a network of Chinese language-based online content channels, as well as community and communication services, including news content, community forums, mobile-based applications, open courses, and interactive online video. It also offers other Web-based applications and services, including a Web directory. In addition, NetEase, Inc. provides online advertising services that include banner advertising, channel sponsorships, direct email, interactive media-rich sites, sponsored special events, games, contests, and other activities; email services to individual and corporate users; and wireless value-added services. Further, the company offers e-commerce services, including Caipiao, an online service that facilitates the processing of end users' purchase orders for lotteries; Baoxian, an online service for the sale of insurance products; Kaola that sells imported maternity and baby products, skincare and cosmetics, and other general merchandise; Yanxuan, which sells its private label products, including apparel, homeware, kitchenware, and other general merchandise; Wangyibao, an online payment platform; EaseRead, an e-reading apps; Cloud Music, an online music social network; and NetEase Cloud Classroom, an online education platform. Additionally, it provides and Internet finance services, as well as sells game-related accessories. 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 based in Beijing, the People's Republic of China.

About Akamai Technologies

Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally. The company offers Web and mobile performance solutions, such as Ion, a situational performance solution; Dynamic Site Accelerator that helps in consistent Website performance; Image Manager that automatically optimizes online images; CloudTest to conduct load testing and other analysis of Websites in a pre-production environment; mPulse that provides real-time Website performance data to provide insight about end-user experiences on a Website; and Global Traffic Management, a fault-tolerant solution. It also provides cloud security solutions, including Web Application Protector to safeguard Web assets from Web application and distributed denial of service; Kona Site Defender, a cloud computing security solution; Bot Manager Premier to identify bots; Fast DNS, which translates human-readable domain names into numerical IP addresses; Prolexic Routed to protect Web- and IP-based applications; and Client Reputation for protection against DDoS and Web application attacks. In addition, the company offers enterprise security solutions, including Enterprise Application Access that enables remote access to applications; and Enterprise Threat Protector to enable enterprise security teams to identify, block, and mitigate targeted threats. Further, it provides network operator solutions, including Aura Licensed CDN, Aura Managed CDN, and Intelligent DNS solutions, as well as professional services and solutions; media delivery solutions, such as adaptive delivery, download delivery, infinite media acceleration, media services, and media analytics solutions; and NetStorage, a cloud storage solution. The company sells its solutions through direct sales and service organization; and channel partners. Akamai Technologies, Inc. was founded in 1998 and is headquartered in Cambridge, Massachusetts.

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