Head to Head Analysis: Alphabet (NASDAQ:GOOGL) & Line (NASDAQ:LN)

Alphabet (NASDAQ:GOOGL) and Line (NYSE:LN) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Institutional and Insider Ownership

34.0% of Alphabet shares are owned by institutional investors. Comparatively, 3.5% of Line shares are owned by institutional investors. 13.2% of Alphabet shares are owned by insiders. 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.

Profitability

This table compares Alphabet and Line’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alphabet 23.43% 20.15% 15.23%
Line -10.63% -12.61% -5.04%

Volatility and Risk

Alphabet has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Line has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Earnings & Valuation

This table compares Alphabet and Line’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alphabet $136.82 billion 5.98 $30.74 billion $47.51 24.82
Line $2.13 billion 3.60 -$33.83 million ($0.16) -201.31

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alphabet 0 6 31 0 2.84
Line 1 2 3 0 2.33

Alphabet currently has a consensus price target of $1,376.11, suggesting a potential upside of 16.70%. Line has a consensus price target of $3,500.00, suggesting a potential upside of 10,766.19%. Given Line’s higher possible upside, analysts plainly believe Line is more favorable than Alphabet.

Summary

Alphabet beats Line on 12 of the 14 factors compared between the two stocks.

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.

About Line

LINE Corporation provides a platform for mobile messaging and communication services, content distribution, and life and financial services primarily in Japan, Taiwan, Thailand, and Indonesia. It operates through two segments, Core Business and Strategic Business. The company offers LINE, a cross-platform messenger application that enables users to communicate through free instant messaging, stickers, and voice and video calls, as well as serves as a smart portal to its other applications and services. It also provides communication products, including LINE Stickers and themes; and contents, such as LINE Games, LINE PLAY, LINE Manga, LINE Music, and LINE Fortune. In addition, the company offers display advertising services through Timeline, LINE NEWS, and LINE TODAY; account advertising products and services comprising official accounts, [email protected], sponsored stickers, and LINE Point Ads; and other advertising products and services that include LINE Part-time Job, livedoor, and Matome Web portals. Further, it sells LINE characters merchandise under the LINE Friends name; and provides fintech services, such as LINE Pay service, as well as other services that include AI and e-commerce. The company was formerly known as NHN Japan Corporation and changed its name to LINE Corporation in April 2013. The company was founded in 2000 and is headquartered in Tokyo, Japan. LINE Corporation is a subsidiary of Naver Corporation.

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