Alphabet (GOOG) vs. Its Competitors Critical Comparison

Alphabet (NASDAQ: GOOG) is one of 44 publicly-traded companies in the “Computer programming, data processing, & other computer related” industry, but how does it weigh in compared to its peers? We will compare Alphabet to related companies based on the strength of its institutional ownership, valuation, earnings, analyst recommendations, dividends, risk and profitability.

Insider and Institutional Ownership

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34.9% of Alphabet shares are owned by institutional investors. Comparatively, 47.5% of shares of all “Computer programming, data processing, & other computer related” companies are owned by institutional investors. 13.9% of Alphabet shares are owned by company insiders. Comparatively, 17.5% of shares of all “Computer programming, data processing, & other computer related” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Alphabet 11.42% 14.94% 12.20%
Alphabet Competitors -15.70% -46.65% -1.75%

Earnings & Valuation

This table compares Alphabet and its peers top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Alphabet $110.86 billion $12.66 billion 31.42
Alphabet Competitors $6.96 billion $966.00 million 37.81

Alphabet has higher revenue and earnings than its peers. Alphabet is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

Alphabet has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Alphabet’s peers have a beta of 1.41, meaning that their average share price is 41% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Alphabet and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alphabet 1 6 32 0 2.79
Alphabet Competitors 506 1895 4605 226 2.63

Alphabet presently has a consensus price target of $1,085.93, suggesting a potential upside of 7.83%. As a group, “Computer programming, data processing, & other computer related” companies have a potential upside of 13.97%. Given Alphabet’s peers higher possible upside, analysts clearly believe Alphabet has less favorable growth aspects than its peers.

Summary

Alphabet beats its peers on 7 of the 13 factors compared.

About Alphabet

Alphabet Inc. is a holding company. The Company’s businesses include Google Inc. (Google) and its Internet products, such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo and X. The Company’s segments include Google and Other Bets. The Google segment includes its Internet products, such as Search, Ads, Commerce, Maps, YouTube, Google Cloud, Android, Chrome and Google Play, as well as its hardware initiatives. The Google segment is engaged in advertising, sales of digital content, applications and cloud offerings, and sales of hardware products. The Other Bets segment is engaged in the sales of Internet and television services through Google Fiber, sales of Nest products and services, and licensing and research and development (R&D) services through Verily. It offers Google Assistant, which allows users to type or talk with Google; Google Maps, which helps users navigate to a store, and Google Photos, which helps users store and organize all of their photos.

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