Lenovo Group (LNVGY) versus Its Competitors Critical Review

Lenovo Group (OTCMKTS:LNVGY) is one of 82 public companies in the “Technology Hardware, Storage & Peripherals” industry, but how does it contrast to its peers? We will compare Lenovo Group to similar businesses based on the strength of its dividends, risk, valuation, institutional ownership, earnings, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Lenovo Group and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lenovo Group	0	2	0	0	2.00
Lenovo Group Competitors	1068	4325	7630	366	2.54

As a group, “Technology Hardware, Storage & Peripherals” companies have a potential upside of 20.30%. Given Lenovo Group’s peers stronger consensus rating and higher possible upside, analysts clearly believe Lenovo Group has less favorable growth aspects than its peers.

Dividends

Lenovo Group pays an annual dividend of $1.67 per share and has a dividend yield of 2.0%. Lenovo Group pays out 162.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Technology Hardware, Storage & Peripherals” companies pay a dividend yield of 2.2% and pay out 31.9% of their earnings in the form of a dividend. Lenovo Group lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Lenovo Group and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lenovo Group	0.88%	34.51%	5.14%
Lenovo Group Competitors	-479.31%	-33.48%	3.17%

Risk & Volatility

Lenovo Group has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Lenovo Group’s peers have a beta of 1.66, meaning that their average share price is 66% more volatile than the S&P 500.

Earnings and Valuation

This table compares Lenovo Group and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Lenovo Group	$83.08 billion	$1.91 billion	80.62
Lenovo Group Competitors	$25.77 billion	$3.72 billion	8.64

Lenovo Group has higher revenue, but lower earnings than its peers. Lenovo Group is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional and Insider Ownership

0.1% of Lenovo Group shares are held by institutional investors. Comparatively, 51.5% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by institutional investors. 10.8% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Lenovo Group peers beat Lenovo Group on 10 of the 15 factors compared.

About Lenovo Group

Lenovo Group Limited, an investment holding company, develops, manufactures, and markets technology products and services. It operates through Intelligent Devices Group, Infrastructure Solutions Group, and Solutions and Services Group segments. The company offers commercial and consumer personal computers, as well as servers and workstations; and a family of mobile Internet devices, including tablets and smartphones. In addition, it provides laptops, monitors, accessories, smart home and collaboration solutions, augmented and virtual reality, commercial internet of things, and smart infrastructure data center solutions. Further, the company manufactures and distributes IT products, computers, computer hardware, and peripheral equipment; and offers IT, business planning, management, supply chain, finance, administration support, procurement agency, data management, intellectual property, and investment management services. Additionally, it is involved in the retail and service business for consumer electronic products and related digital services; development, ownership, licensing, and sale of communications hardware and software; and develops software and applications. Furthermore, the company distributes smartphone, tablet, server, and storage. It operates in China, the Asia Pacific, Europe, the Middle East, Africa, and the Americas. Lenovo Group Limited was founded in 1984 and is headquartered in Quarry Bay, Hong Kong.