Head to Head Analysis: Alphabet (NASDAQ:GOOGL) versus Dropbox (NASDAQ:DBX)

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Alphabet and Dropbox, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alphabet	0	10	29	4	2.86
Dropbox	0	2	1	0	2.33

Alphabet currently has a consensus target price of $200.00, suggesting a potential upside of 15.00%. Dropbox has a consensus target price of $31.00, suggesting a potential upside of 12.67%. Given Alphabet’s stronger consensus rating and higher possible upside, equities analysts clearly believe Alphabet is more favorable than Dropbox.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alphabet	30.86%	34.54%	25.07%
Dropbox	18.50%	-79.66%	18.89%

Volatility and Risk

Alphabet has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Dropbox has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Earnings & Valuation

This table compares Alphabet and Dropbox”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alphabet	$350.02 billion	6.03	$100.12 billion	$8.97	19.39
Dropbox	$2.55 billion	3.04	$452.30 million	$1.53	17.98

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

Institutional & Insider Ownership

40.0% of Alphabet shares are owned by institutional investors. Comparatively, 94.8% of Dropbox shares are owned by institutional investors. 11.6% of Alphabet shares are owned by company insiders. Comparatively, 28.6% of Dropbox shares are owned by company 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

Alphabet beats Dropbox on 13 of the 15 factors compared between the two stocks.

About Alphabet

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.

About Dropbox

Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.