Critical Survey: Alphabet (GOOG) and Its Competitors

Alphabet (NASDAQ: GOOG) is one of 44 publicly-traded companies in the “Computer programming, data processing, & other computer related” industry, but how does it weigh in compared to its competitors? We will compare Alphabet to related companies based on the strength of its dividends, profitability, analyst recommendations, risk, earnings, institutional ownership and valuation.

Profitability

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This table compares Alphabet and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alphabet 11.42% 14.94% 12.20%
Alphabet Competitors -16.11% -45.92% -1.15%

Insider & Institutional Ownership

34.8% of Alphabet shares are held by institutional investors. Comparatively, 49.2% of shares of all “Computer programming, data processing, & other computer related” companies are held by institutional investors. 13.9% of Alphabet shares are held by company insiders. Comparatively, 14.7% of shares of all “Computer programming, data processing, & other computer related” companies are held by company 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.

Risk & Volatility

Alphabet has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Alphabet’s competitors have a beta of 1.41, indicating that their average share price is 41% more volatile than the S&P 500.

Earnings & Valuation

This table compares Alphabet and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Alphabet $110.86 billion $12.66 billion 33.48
Alphabet Competitors $6.96 billion $964.57 million 40.63

Alphabet has higher revenue and earnings than its competitors. Alphabet is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings for Alphabet and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alphabet 1 6 33 0 2.80
Alphabet Competitors 509 1909 4641 230 2.63

Alphabet presently has a consensus price target of $1,085.73, indicating a potential upside of 1.19%. As a group, “Computer programming, data processing, & other computer related” companies have a potential upside of 8.05%. Given Alphabet’s competitors higher probable upside, analysts plainly believe Alphabet has less favorable growth aspects than its competitors.

Summary

Alphabet beats its competitors on 7 of the 13 factors compared.

About Alphabet

Alphabet Inc., through its subsidiaries, provides online advertising services in the United States and internationally. The company offers performance and brand advertising services. It operates through Google and Other Bets segments. The Google segment includes principal Internet products, such as Ads, Android, Chrome, Commerce, Google Cloud, Google Maps, Google Play, Hardware, Search, and YouTube, as well as technical infrastructure and newer efforts, including Virtual Reality. This segment also offers digital content, enterprise cloud services, and hardware products, as well as other miscellaneous products and services. The Other Bets segment includes businesses, such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X, as well as fiber Internet and Television services. Alphabet Inc. was founded in 1998 and is headquartered in Mountain View, California.

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