Critical Survey: Stars Group (TSG) and Baidu (BIDU)

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Stars Group (NASDAQ: TSG) and Baidu (NASDAQ:BIDU) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Valuation and Earnings

This table compares Stars Group and Baidu’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stars Group $1.31 billion 4.73 $259.23 million $2.25 16.29
Baidu $13.03 billion 6.56 $2.81 billion $8.06 30.57

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

Risk & Volatility

Stars Group has a beta of 1.8, suggesting that its share price is 80% more volatile than the S&P 500. Comparatively, Baidu has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500.

Profitability

This table compares Stars Group and Baidu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stars Group 19.39% 24.66% 8.95%
Baidu 26.48% 19.87% 9.16%

Analyst Recommendations

This is a summary of recent ratings for Stars Group and Baidu, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stars Group 0 1 0 0 2.00
Baidu 0 7 14 1 2.73

Baidu has a consensus target price of $281.07, suggesting a potential upside of 14.06%. Given Baidu’s stronger consensus rating and higher possible upside, analysts clearly believe Baidu is more favorable than Stars Group.

Insider & Institutional Ownership

64.3% of Stars Group shares are owned by institutional investors. Comparatively, 60.8% of Baidu shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Baidu beats Stars Group on 12 of the 14 factors compared between the two stocks.

Stars Group Company Profile

The Stars Group Inc. provides technology-based products and services to gaming and interactive entertainment industries in Canada and internationally. It owns and operates gaming and related interactive entertainment businesses under the PokerStars, PokerStars Casino, BetStars, Full Tilt, the PokerStars Players No Limit Hold'em Championship, European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour, Asia Pacific Poker Tour, PokerStars Festival, and PokerStars MEGASTACK live poker tour and event brands, The company was formerly known as Amaya, Inc. and changed its name to The Stars Group Inc. in August 2017. The Stars Group Inc. was founded in 2004 and is headquartered in Toronto, Canada.

Baidu Company Profile

Baidu, Inc. provides Internet search services in China and internationally. It operates through two segments, Baidu Core and iQIYI. The Baidu Core segment offers products for uses, including Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services through mobile browsers; Baidu Feed that provides users with personalized timeline to meet their personal interests reflected in their past online behaviors, such as search and browsing, and their demographics; and Bear Paw Account that enables verified brands and businesses to aggregate their content from Websites, wapsites, and open-platform apps. It also provides Baijiahao, a publisher platform for content providers; Baidu Post Bar, a social media platform; Haokan Videos, an online short-form video aggregation platform; Baidu Knows, a knowledge sharing platform; Baidu Encyclopedia; Baidu Education, an online educational resources platform; Baidu Mobile Assistant, a mobile app marketplace; Baidu Mobile Guardian, a phone security software; DuerOS, a conversational artificial intelligence platform; Baidu Wallet, an online and mobile payment service; Baidu Consumer Credit, an installment payment service; Baidu Wealth Management, a wealth management service; Baidu Maps that offers services relating to locations and intelligent routing and navigation; Baidu Cloud Drive, a personal cloud service platform; and various mobile products and services. In addition, this segment offers online marketing services based on search queries, contextuals, audience attributes, media and placement attributes, as well as Baidu Feed; Baidu Cloud, a public cloud computing platform; and Apollo, an open source autonomous driving platform. The iQIYI segment provides Internet video streaming services. The company was formerly known as Baidu.com, Inc. and changed its name to Baidu, Inc. in December 2008. Baidu, Inc. was founded in 2000 and is headquartered in Beijing, China.

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