Alliance Entertainment (NASDAQ:AENT – Get Free Report) and Tencent Music Entertainment Group (NYSE:TME – Get Free Report) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, dividends, risk, institutional ownership and valuation.
Risk and Volatility
Alliance Entertainment has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500. Comparatively, Tencent Music Entertainment Group has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.
Valuation & Earnings
This table compares Alliance Entertainment and Tencent Music Entertainment Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Alliance Entertainment | $1.10 billion | 0.17 | $4.58 million | $0.24 | 15.04 |
| Tencent Music Entertainment Group | $3.89 billion | 8.30 | $924.18 million | $0.84 | 22.39 |
Tencent Music Entertainment Group has higher revenue and earnings than Alliance Entertainment. Alliance Entertainment is trading at a lower price-to-earnings ratio than Tencent Music Entertainment Group, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations for Alliance Entertainment and Tencent Music Entertainment Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alliance Entertainment | 0 | 0 | 0 | 0 | 0.00 |
| Tencent Music Entertainment Group | 0 | 2 | 8 | 1 | 2.91 |
Tencent Music Entertainment Group has a consensus price target of $16.60, indicating a potential downside of 11.74%. Given Tencent Music Entertainment Group’s stronger consensus rating and higher probable upside, analysts clearly believe Tencent Music Entertainment Group is more favorable than Alliance Entertainment.
Profitability
This table compares Alliance Entertainment and Tencent Music Entertainment Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alliance Entertainment | 1.10% | 15.59% | 3.86% |
| Tencent Music Entertainment Group | 32.73% | 10.95% | 8.40% |
Insider and Institutional Ownership
0.3% of Alliance Entertainment shares are owned by institutional investors. Comparatively, 24.3% of Tencent Music Entertainment Group shares are owned by institutional investors. 81.9% of Alliance Entertainment shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Summary
Tencent Music Entertainment Group beats Alliance Entertainment on 13 of the 15 factors compared between the two stocks.
About Alliance Entertainment
Alliance Entertainment Holding Corporation operates as a wholesaler, distributor, and e-commerce provider for the entertainment industry worldwide. It offers vinyl records, video games, digital video discs, blu-rays, toys, compact discs, collectibles, and other entertainment and consumer products. The company also provides third party logistics products and services. It distributes its physical media, entertainment products, hardware, and accessories through multi-channel strategy. The company was founded in 1990 and is headquartered in Plantation, Florida.
About Tencent Music Entertainment Group
Tencent Music Entertainment Group operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services in the People's Republic of China. It offers QQ Music, Kugou Music, and Kuwo Music that enable users to discover music in personalized ways; long-form audio content, including audiobooks, podcasts and talk shows, as well as music-oriented video content comprising music videos, live performances, and short videos; and WeSing, which enables users to sing along from its library of karaoke songs and share their performances in audio or video formats with friends. The company also delivers music-centric live streaming services primarily through the Live Streaming tab on QQ Music, Kugou Music, Kuwo Music, WeSing, Kugou Live, and Kuwo Live that provides an interactive online stage for performers and users to showcase their talent and engage with a diverse audience base; and Lazy Audio, an audio platform. In addition, it sells music-related merchandise; and artist-related merchandise, such as branded apparel, posters and art prints, and accessories and integrated and technology-driven music solutions that help IoT device manufacturers build and operate their branded music services on their IoT devices, as well as offers advertising services across its online karaoke platform and online music apps. The company is headquartered in Shenzhen, China. Tencent Music Entertainment Group is a subsidiary of Tencent Holdings Limited.
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