TripAdvisor, Inc. (NASDAQ:TRIP) and Alphabet Inc. (NASDAQ:GOOGL) are both Technology companies that recently hit new highs. The recent price action of these companies has left many investors wondering what actions to take. To determine if one is a better investment than the other, we will compare the two names across various metrics, including growth, profitability, risk, return, dividends, and valuation.
TripAdvisor, Inc. (NASDAQ:TRIP) operates in the Internet Information Providers segment of the Technology sector. The company has grown sales at a 18.40% annual rate over the past five years, putting it in the high growth category. TRIP has a net profit margin of 4.30% and is more profitable than the average company in the Internet Information Providers industry. In terms of efficiency, TRIP has an asset turnover ratio of 0.66. This figure represents the amount of revenue a company generates per dollar of assets. TRIP’s financial leverage ratio is 0.66, which indicates that the company’s asset base is primarily funded by equity capital. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is 4.70%, which is worse than the Internet Information Providers industry average ROE.
Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is -3.13. Company trades at a P/E ratio of 73.48 , and is more expensive than the average stock in the Internet Information Providers industry. The average investment recommendation for TRIP, taken from a group of Wall Street Analysts, is 3.20, or a hold.
Over the past three months, TripAdvisor, Inc. insiders have been net buyers, dumping a net of -48,349 shares. This implies that insiders have been feeling relatively bearish about the outlook for TRIP. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. TRIP has a beta of 2.36 and therefore an above average level of market volatility.
Alphabet Inc. (NASDAQ:GOOGL) operates in the Internet Information Providers segment of the Technology sector. GOOGL has increased sales at a 19.00% CAGR over the past five years, and is considered a high growth stock. The company has a net profit margin of 20.10% and is more profitable than the average Internet Information Providers player. GOOGL’s asset turnover ratio is 2.03 and the company has financial leverage of 0.21. GOOGL’s return on equity of 14.30% is worse than the Internet Information Providers industry average.
Stock has a payout ratio of 0.00%. According to this ratio, GOOGL should be able to continue making payouts at these levels. The company trades at a free cash flow yield of 0.87 and has a P/E of 33.97. Compared to the average company in the 32.03 space, GOOGL is relatively expensive. The average analyst recommendation for GOOGL is 1.80, or a buy.
Alphabet Inc. insiders have sold a net of 0 shares during the past three months, which implies that the company’s top executives have been feeling bearish about the stock’s outlook. Finally, GOOGL’s beta of 0.91 indicates that the stock has an above average level of market risk.
TripAdvisor, Inc. (NASDAQ:GOOGL) scores higher than Alphabet Inc. (NASDAQ:TRIP) on 10 of the 13 measures compared between the two companies. GOOGL has the better fundamentals, scoring higher on growth, profitability, efficiency, leverage and return metrics. GOOGL wins on valuation measures. GOOGL has better insider activity and sentiment signals.