JD.com (JD) and MercadoLibre (MELI) Financial Review

JD.com (NASDAQ: JD) and MercadoLibre (NASDAQ:MELI) are both large-cap retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Dividends

MercadoLibre pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. JD.com does not pay a dividend. MercadoLibre pays out 18.4% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares JD.com and MercadoLibre’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
JD.com $46.97 billion 1.10 $504.06 million ($0.31) -139.64
MercadoLibre $1.08 billion 11.89 $249.48 million $3.26 89.20

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for JD.com and MercadoLibre, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
JD.com 0 2 15 0 2.88
MercadoLibre 1 5 6 0 2.42

JD.com presently has a consensus price target of $42.94, indicating a potential downside of 0.81%. MercadoLibre has a consensus price target of $261.67, indicating a potential downside of 10.02%. Given JD.com’s stronger consensus rating and higher probable upside, equities analysts clearly believe JD.com is more favorable than MercadoLibre.

Insider and Institutional Ownership

46.4% of JD.com shares are owned by institutional investors. Comparatively, 85.8% of MercadoLibre shares are owned by institutional investors. 0.4% of MercadoLibre shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

JD.com has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 2.04, indicating that its share price is 104% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
JD.com -0.95% -1.80% -0.44%
MercadoLibre 13.37% 37.59% 11.81%

Summary

MercadoLibre beats JD.com on 9 of the 15 factors compared between the two stocks.

JD.com Company Profile

JD.com, Inc. is an online direct sales company. The Company engages in the sale of electronics and home appliance products and general merchandise products (including audio, video products and books) sourced from manufacturers, distributors and publishers in China on the Internet through its Website, www.jd.com. It also offers an online marketplace that enables third-party sellers to sell their products to customers on the Company’s Website. The Company operates through the provision of a single class of services for accelerating and improving the delivery of its products over the Internet. The Company also offers online and in-person payment options and customer services. The Company operates approximately 210 warehouses with an aggregate gross floor area of approximately four million square meters in over 50 cities. It operates over 5,370 delivery stations and pickup stations in approximately 2,350 counties and districts across China.

MercadoLibre Company Profile

MercadoLibre, Inc. is an e-commerce company. The Company enables commerce through its marketplace platform in Latin America, which is designed to provide users with a portfolio of services to facilitate commercial transactions. Its geographic segments are Brazil, Argentina, Mexico Venezuela and Other Countries (which includes Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal, Guatemala, Bolivia, Paraguay, Uruguay and the United States of America). It also operates online commerce platforms in the Dominican Republic, Honduras, Nicaragua, Salvador, Panama, Bolivia, Guatemala, Paraguay and Portugal. It offers an ecosystem of six integrated e-commerce services: the MercadoLibre Marketplace, the MercadoLibre Classifieds Service, the MercadoPago payments solution, the MercadoLibre advertising program, the MercadoShops online Webstores solution and the MercadoEnvios shipping service.

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