Critical Analysis: Tencent (TCEHY) versus Altisource Portfolio Solutions (ASPS)

Tencent (OTCMKTS: TCEHY) and Altisource Portfolio Solutions (NASDAQ:ASPS) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Tencent and Altisource Portfolio Solutions, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tencent 0 0 4 0 3.00
Altisource Portfolio Solutions 0 2 0 0 2.00

Tencent currently has a consensus price target of $65.00, indicating a potential upside of 23.25%. Altisource Portfolio Solutions has a consensus price target of $20.50, indicating a potential downside of 34.08%. Given Tencent’s stronger consensus rating and higher probable upside, equities analysts clearly believe Tencent is more favorable than Altisource Portfolio Solutions.

Volatility & Risk

Tencent has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Altisource Portfolio Solutions has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Valuation & Earnings

This table compares Tencent and Altisource Portfolio Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tencent $36.39 billion 13.77 $10.58 billion $0.94 56.11
Altisource Portfolio Solutions $899.56 million 0.59 $308.89 million $2.80 11.11

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

Profitability

This table compares Tencent and Altisource Portfolio Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tencent 30.70% 23.89% 11.67%
Altisource Portfolio Solutions 34.24% 24.48% 6.65%

Dividends

Tencent pays an annual dividend of $0.10 per share and has a dividend yield of 0.2%. Altisource Portfolio Solutions does not pay a dividend. Tencent pays out 10.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

0.3% of Tencent shares are owned by institutional investors. Comparatively, 68.8% of Altisource Portfolio Solutions shares are owned by institutional investors. 7.8% of Altisource Portfolio Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Tencent beats Altisource Portfolio Solutions on 10 of the 16 factors compared between the two stocks.

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.

Altisource Portfolio Solutions Company Profile

Altisource Portfolio Solutions S.A. operates as an integrated service provider and marketplace for the real estate and mortgage industries in the United States. It operates in two segments, Mortgage Market and Real Estate Market. The company offers property preservation and inspection, real estate brokerage and auction, title insurance and settlement, appraisal management, broker and non-broker valuation, foreclosure trustee, residential and commercial loan servicing technology, vendor management, marketplace transaction and payment management technology, document management platform, default services technology, and mortgage charge-off collection services. It also provides residential and commercial loan disbursement processing, risk mitigation, and construction inspection services; and fulfillment, loan origination system, certified loan insurance and certification, vendor management oversight platform, mortgage banker cooperative management, and mortgage trading platform solutions. In addition, the company offers mortgage brokerage and homeowners insurance solutions; and data, buy-renovate-lease-sell, renovation, property management, and appraisal management solutions, as well as real estate brokerage services under the Owners.com name. Further, it provides post-charge-off consumer debt collection services, customer relationship management services, and information technology infrastructure management services. The company serves financial institutions, government-sponsored enterprises, utility companies, commercial banks, servicers, investors, non-bank originators, correspondent lenders, mortgage bankers, insurance companies, and financial services companies. Altisource Portfolio Solutions S.A. was incorporated in 1999 and is headquartered in Luxembourg City, Luxembourg.

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