Head-To-Head Contrast: KE (NYSE:BEKE) versus Sunlands Technology Group (NYSE:STG)

Sunlands Technology Group (NYSE:STG) and KE (NYSE:BEKE) 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, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and target prices for Sunlands Technology Group and KE, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunlands Technology Group	1	0	0	0	1.00
KE	0	3	5	0	2.63

KE has a consensus target price of $22.40, suggesting a potential upside of 36.25%. Given KE’s stronger consensus rating and higher possible upside, analysts plainly believe KE is more favorable than Sunlands Technology Group.

Earnings & Valuation

This table compares Sunlands Technology Group and KE”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunlands Technology Group	$2.03 billion	0.03	$46.87 million	$3.98	1.14
KE	$103.52 billion	0.19	$556.89 million	$0.42	39.14

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

Profitability

This table compares Sunlands Technology Group and KE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunlands Technology Group	18.99%	52.03%	18.14%
KE	3.37%	5.47%	2.99%

Volatility and Risk

Sunlands Technology Group has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, KE has a beta of -0.62, suggesting that its stock price is 162% less volatile than the S&P 500.

Dividends

Sunlands Technology Group pays an annual dividend of $0.63 per share and has a dividend yield of 13.9%. KE pays an annual dividend of $0.31 per share and has a dividend yield of 1.9%. Sunlands Technology Group pays out 15.8% of its earnings in the form of a dividend. KE pays out 73.8% 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. Sunlands Technology Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

26.4% of Sunlands Technology Group shares are held by institutional investors. Comparatively, 39.3% of KE shares are held by institutional investors. 59.7% of Sunlands Technology Group shares are held by insiders. Comparatively, 6.8% of KE shares are held 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.

About Sunlands Technology Group

Sunlands Technology Group, through its subsidiaries, provides online education services through online and mobile platforms in the People's Republic of China. It offers various degree- and diploma-oriented post-secondary courses, including preparation courses for the self-taught higher education examination (STE) for learners pursuing associate diplomas or bachelor's degrees, as well as for the entrance examinations of Master of Business Administration programs. The company's STE courses include Chinese language and literature, law, pre-school education, marketing, English, human resource management, business administration, business management, modern corporate governance, financial management, advertising, accounting, administrative management, computer information management, finance, chain operation management, and visual communication and design and production. It also provides professional certification preparation courses in various industries and professions, such as accounting, human resources, teaching, and finance. In addition, the company offers education services through online and mobile platforms to adult students, pursuing post-secondary, and professional educations. The company was formerly known as Sunlands Online Education Group and changed its name to Sunlands Technology Group in August 2018. Sunlands Technology Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.

About KE

KE Holdings Inc., through its subsidiaries, engages in operating an integrated online and offline platform for housing transactions and services in the People's Republic of China. It operates through four segments: Existing Home Transaction Services, New Home Transaction Services, Home Renovation and Furnishing, and Emerging and Other Services. The company operates Beike, an integrated online and offline platform for housing transactions and services; Lianjia, a real estate brokerage branded store; Agent Cooperation Network, an operating system that fosters reciprocity and bonding among various service providers; and software-as-a-service systems. It also owns the Deyou brand for connected brokerage stores; and other brands. In addition, the company offers contract, secure payment, escrow, and other services. KE Holdings Inc. was founded in 2001 and is headquartered in Beijing, the People's Republic of China.