Analyzing PDD (NASDAQ:PDD) and SEA (NYSE:SE)

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

Institutional and Insider Ownership

39.8% of PDD shares are owned by institutional investors. Comparatively, 59.5% of SEA shares are owned by institutional investors. 3.7% of PDD shares are owned by insiders. Comparatively, 0.2% of SEA shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PDD	$61.75 billion	1.79	$13.99 billion	$9.08	8.57
SEA	$22.94 billion	2.83	$1.58 billion	$2.59	41.02

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.

Profitability

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

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

Analyst Ratings

This is a summary of recent ratings for PDD and SEA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDD	1	10	5	0	2.25
SEA	1	2	10	1	2.79

PDD currently has a consensus price target of $113.31, indicating a potential upside of 45.62%. SEA has a consensus price target of $149.40, indicating a potential upside of 40.64%. Given PDD’s higher possible upside, analysts clearly believe PDD is more favorable than SEA.

Risk & Volatility

PDD has a beta of -0.01, meaning that its share price is 101% less volatile than the S&P 500. Comparatively, SEA has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Summary

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

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.

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.