Financial Review: SEA (NYSE:SE) and PDD (NASDAQ:PDD)

SEA (NYSE:SE) and PDD (NASDAQ:PDD) 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 dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SEA	$22.94 billion	3.01	$1.58 billion	$2.59	43.69
PDD	$61.75 billion	1.94	$13.99 billion	$9.08	9.25

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

Volatility and Risk

SEA has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, PDD has a beta of 0.01, meaning that its share price is 99% less volatile than the S&P 500.

Institutional and Insider Ownership

59.5% of SEA shares are held by institutional investors. Comparatively, 39.8% of PDD shares are held by institutional investors. 0.2% of SEA shares are held by company insiders. Comparatively, 3.7% of PDD shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SEA	5.98%	13.54%	5.59%
PDD	20.73%	22.29%	14.68%

Analyst Ratings

This is a breakdown of current ratings for SEA and PDD, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SEA	1	3	8	1	2.69
PDD	1	8	6	0	2.33

SEA currently has a consensus price target of $151.90, suggesting a potential upside of 34.23%. PDD has a consensus price target of $117.17, suggesting a potential upside of 39.48%. Given PDD’s higher probable upside, analysts plainly believe PDD is more favorable than SEA.

Summary

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

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.

About PDD

PDD Holdings Inc., a multinational commerce group, owns and operates a portfolio of businesses. It operates Pinduoduo, an e-commerce platform that offers products in various categories, including agricultural produce, apparel, shoes, bags, mother and childcare products, food and beverage, electronic appliances, furniture and household goods, cosmetics and other personal care, sports and fitness items and auto accessories; and Temu, an online marketplace. It focuses on bringing businesses and people into the digital economy. The company was formerly known as Pinduoduo Inc. and changed its name to PDD Holdings Inc. in February 2023. The company was incorporated in 2015 and is based in Dublin, Ireland.