Analyzing YY (YY) and Tucows (TCX)

YY (NASDAQ: YY) and Tucows (NASDAQ:TCX) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Institutional and Insider Ownership

54.7% of YY shares are held by institutional investors. Comparatively, 42.9% of Tucows shares are held by institutional investors. 43.0% of YY shares are held by insiders. Comparatively, 13.2% of Tucows shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares YY and Tucows’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
YY 22.08% 39.07% 22.15%
Tucows 6.06% 41.65% 6.52%

Analyst Recommendations

This is a breakdown of current ratings for YY and Tucows, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YY 1 5 9 0 2.53
Tucows 0 0 0 0 N/A

YY presently has a consensus target price of $70.21, indicating a potential downside of 12.80%. Given YY’s higher possible upside, equities research analysts clearly believe YY is more favorable than Tucows.

Volatility & Risk

YY has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Tucows has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Earnings and Valuation

This table compares YY and Tucows’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
YY N/A N/A N/A $5.24 15.37
Tucows $251.66 million 2.28 $29.37 million $1.43 38.29

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

Summary

YY beats Tucows on 7 of the 11 factors compared between the two stocks.

About YY

YY Inc. (YY) is a social platform that engages users in real-time online group activities through voice, video and text on personal computers and mobile devices. The Company’s segments include YY IVAS and others, Huya broadcasting, and 100 Education. YY enables users to create and organize groups of varying sizes to discover and participate in a range of online activities, including music shows, online games, dating shows, live game broadcasting and e-learning. YY offers users an entertainment experience through its social community. It owns the domain names of YY.com, Duowan.com, 100.com, Huya.com, Edu24ol.com and Zhiniu8.com. The Company’s YY platform, including YY.com, is jointly operated by personnel from Guangzhou Huaduo and Zhuhai Duowan. Its product, YY Client, enables users to engage in live interactions online. Its Web-based YY enables users to conduct real-time interactions through Web browsers without requiring any downloads or installations.

About Tucows

Tucows Inc. is engaged in providing Internet services. The Company’s segments include Network Access Services and Domain Services. The Network Access Services segment includes mobile, fixed high-speed Internet access services, Internet hosting and network consulting services. The Domain Services segment wholesale and retail domain name registration services, value added services and portfolio services. The Company focuses on serving the needs of this network of resellers by providing services, interfaces, proactive and attentive customer service, reseller-oriented technology and agile design and development processes. The Company focuses its service offerings under brands, including OpenSRS, YummyNames, Platypus, Hover and Ting. As of December 31, 2016, the OpenSRS Domain Service managed 15 million domain names under the Tucows ICANN registrar accreditation and for other registrars. As of December 31, 2016, Ting managed mobile telephony services for approximately 151,000 subscribers.

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