Reviewing Rakuten Group (OTCMKTS:RKUNF) and PDD (NASDAQ:PDD)

PDD (NASDAQ:PDD) and Rakuten Group (OTCMKTS:RKUNF) are both multi-sector conglomerates companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Institutional & Insider Ownership

29.1% of PDD shares are held by institutional investors. Comparatively, 18.9% of Rakuten Group shares are held by institutional investors. 3.7% of PDD shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for PDD and Rakuten Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDD	0	0	9	0	3.00
Rakuten Group	0	0	0	0	N/A

PDD presently has a consensus price target of $188.33, suggesting a potential upside of 30.59%. Given PDD’s higher possible upside, equities research analysts clearly believe PDD is more favorable than Rakuten Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PDD	26.93%	45.04%	24.45%
Rakuten Group	N/A	N/A	N/A

Earnings & Valuation

This table compares PDD and Rakuten Group’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PDD	$34.88 billion	5.69	$8.45 billion	$7.55	19.10
Rakuten Group	N/A	N/A	N/A	$27.96	0.23

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

Summary

PDD beats Rakuten Group on 9 of the 10 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 Rakuten Group

Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Setagaya, Japan.