Head to Head Analysis: SEA (NYSE:SE) and MercadoLibre (NASDAQ:MELI)

MercadoLibre (NASDAQ:MELI) and SEA (NYSE:SE) are both large-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.

Analyst Recommendations

This is a summary of current recommendations and price targets for MercadoLibre and SEA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MercadoLibre	0	6	11	0	2.65
SEA	1	2	8	1	2.75

MercadoLibre currently has a consensus price target of $2,272.00, indicating a potential upside of 13.72%. SEA has a consensus price target of $149.11, indicating a potential upside of 30.96%. Given SEA’s stronger consensus rating and higher probable upside, analysts plainly believe SEA is more favorable than MercadoLibre.

Profitability

This table compares MercadoLibre and SEA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MercadoLibre	5.30%	26.54%	4.19%
SEA	5.98%	13.54%	5.59%

Volatility & Risk

MercadoLibre has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, SEA has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500.

Insider and Institutional Ownership

87.6% of MercadoLibre shares are owned by institutional investors. Comparatively, 59.5% of SEA shares are owned by institutional investors. 0.3% of MercadoLibre shares are owned by insiders. Comparatively, 0.2% of SEA shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares MercadoLibre and SEA”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MercadoLibre	$35.18 billion	2.88	$2.00 billion	$36.77	54.33
SEA	$22.94 billion	3.03	$1.58 billion	$2.59	43.96

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

Summary

MercadoLibre beats SEA on 8 of the 15 factors compared between the two stocks.

About MercadoLibre

MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.

About SEA

Sea Ltd. is an internet and mobile platform company, which engages in the provision of online gaming services. It operates through the following segments: Digital Entertainment, E-Commerce, and Digital Financial Services. The Digital Entertainment segment offers and develops mobile and PC online games. The E-Commerce segment manages a third-party marketplace through the Shopee mobile app and websites that connect buyers and sellers. The Digital Financial Services segment includes a variety of payment services and loans to individuals and businesses through SeaMoney. Sea was founded by Xiao Dong Li, Gang Ye, and Jing Ye Chen on May 8, 2009 and is headquartered in Singapore.