Financial Analysis: United Internet (OTCMKTS:UDIRF) vs. iQIYI (NASDAQ:IQ)

United Internet (OTCMKTS:UDIRF) and iQIYI (NASDAQ:IQ) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for United Internet and iQIYI, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Internet	1	0	0	0	1.00
iQIYI	2	3	3	0	2.13

iQIYI has a consensus price target of $2.57, suggesting a potential upside of 39.14%. Given iQIYI’s stronger consensus rating and higher probable upside, analysts clearly believe iQIYI is more favorable than United Internet.

Risk and Volatility

United Internet has a beta of 0.14, suggesting that its stock price is 86% less volatile than the S&P 500. Comparatively, iQIYI has a beta of -0.03, suggesting that its stock price is 103% less volatile than the S&P 500.

Institutional & Insider Ownership

52.7% of iQIYI shares are held by institutional investors. 57.8% of iQIYI shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares United Internet and iQIYI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Internet	1.90%	2.19%	1.00%
iQIYI	-1.45%	-2.44%	-0.71%

Valuation and Earnings

This table compares United Internet and iQIYI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Internet	$6.85 billion	0.77	$114.57 million	$0.74	36.94
iQIYI	$4.00 billion	0.44	$104.68 million	($0.06)	-30.83

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

Summary

United Internet beats iQIYI on 9 of the 14 factors compared between the two stocks.

About United Internet

United Internet AG, through its subsidiaries, operates as an Internet service provider worldwide. The company operates through Consumer Access, Business Access, Consumer Applications, and Business Applications segments. It offers landline-based broadband and mobile internet products, including home networks, online storage, telephony, and IPTV for private users; and telecommunication products ranging from fiber-optic direct connections to tailored ICT solutions, which include voice, data, and network solutions, as well as infrastructure services to national and international carriers and ISPs. The company also provides applications and services for home users, such as personal information management applications comprising email, to-do lists, appointments, and addresses; and online cloud storage, as well as domains and website solutions. In addition, it provides business applications for freelancers and small to medium enterprises, such as domains, websites, web hosting, servers, cloud solutions, e-shops, group work, online cloud storage, and office software. It offers its access products through the yourfone, smartmobile.de, 1&1, and 1&1 Versatel brands; and applications through GMX, mail.com, WEB.DE, home.pl, Arsys, STRATO, IONOS, Fasthosts, we22, InterNetX, united-domains, and World4You brand names. In addition, the company offers customers professional services in the fields of active domain management; performance-based advertising and sales services under the Sedo brand name; online advertising services under the United Internet Media brand name; and white-label website builder services under the we22 brand, as well as sells IT hardware. The company was incorporated in 1988 and is headquartered in Montabaur, Germany.

About iQIYI

iQIYI, Inc., together with its subsidiaries, provides online entertainment video services in the People's Republic of China. It offers various products and services, including online video, online games, online literature, animations, and other products. The company operates a platform that provides a collection of internet video content, such as professionally produced content licensed from professional content providers and self-produced content. It also offers membership, online advertising, content distribution, and live broadcasting services. In addition, the company operates iQIYI Show, a live broadcasting platform that enables users to follow their favorite hosts and shows in real time through live broadcasting; and iQIYI Lite that offers an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu, Inc.