Johnson Controls International (NYSE: JCI) and Tencent (OTCMKTS:TCEHY) are both large-cap industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.
Analyst Ratings
Get Johnson Controls International alerts:This is a summary of recent ratings and recommmendations for Johnson Controls International and Tencent, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Johnson Controls International | 2 | 8 | 6 | 0 | 2.25 |
| Tencent | 0 | 0 | 4 | 0 | 3.00 |
Johnson Controls International presently has a consensus price target of $45.00, indicating a potential upside of 27.88%. Tencent has a consensus price target of $65.00, indicating a potential upside of 24.66%. Given Johnson Controls International’s higher probable upside, analysts plainly believe Johnson Controls International is more favorable than Tencent.
Dividends
Johnson Controls International pays an annual dividend of $1.04 per share and has a dividend yield of 3.0%. Tencent pays an annual dividend of $0.10 per share and has a dividend yield of 0.2%. Johnson Controls International pays out 40.0% of its earnings in the form of a dividend. Tencent pays out 10.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Profitability
This table compares Johnson Controls International and Tencent’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Johnson Controls International | 6.83% | 11.60% | 4.89% |
| Tencent | 30.70% | 25.58% | 12.48% |
Volatility & Risk
Johnson Controls International has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Tencent has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.
Institutional & Insider Ownership
91.3% of Johnson Controls International shares are owned by institutional investors. Comparatively, 0.3% of Tencent shares are owned by institutional investors. 0.4% of Johnson Controls International 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.
Valuation & Earnings
This table compares Johnson Controls International and Tencent’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Johnson Controls International | $30.17 billion | 1.08 | $1.61 billion | $2.60 | 13.53 |
| Tencent | $36.39 billion | 13.62 | $10.58 billion | $0.94 | 55.47 |
Tencent has higher revenue and earnings than Johnson Controls International. Johnson Controls International is trading at a lower price-to-earnings ratio than Tencent, indicating that it is currently the more affordable of the two stocks.
Summary
Tencent beats Johnson Controls International on 10 of the 16 factors compared between the two stocks.
Johnson Controls International Company Profile
Johnson Controls International plc operates as a diversified technology and multi industrial company worldwide. The company operates through Building Technologies & Solutions and Power Solutions segments. It designs, sells, controls, installs heating, ventilating, and air conditioning systems. The company also provides residential air conditioning and heating systems, and industrial refrigeration products, as well as technical and energy management consulting services. In addition, it designs, sells, installs, services, and monitors electronic security systems, and fire detection and suppression systems; and manufactures and sells intrusion security products, anti-theft devices, breathing apparatus, and access control and video management systems for commercial, industrial, retail, residential, small business, institutional, and governmental customers. Further, the company produces and supplies lead-acid automotive batteries for passenger cars, light trucks, and utility vehicles, as well as advanced battery technologies to power start-stop, hybrid, and electric vehicles. It offers its lead-acid automotive batteries to automotive original equipment manufacturers and the general vehicle battery aftermarket. The company was formerly known as Johnson Controls, Inc. and changed its name to Johnson Controls International plc in September 2016. Johnson Controls International plc was founded in 1885 and is headquartered in Cork, Ireland.
Tencent Company Profile
Tencent Holdings Limited, an investment holding company, provides Internet value-added services (VAS) and online advertising services in Mainland China, Hong Kong, North America, Europe, other Asian countries, and internationally. The company operates through VAS, Online Advertising, and Others segments. It offers online/mobile games, community VAS, and applications across various Internet and mobile platforms; instant messaging services; and online literature services. The company's online advertising services include display advertising; and delivery of pay-for click, pay-for download, or pay-for instant display advertisements. The company also provides payment related, cloud, and other services. In addition, it is involved in the development of software and provision of information technology services; asset management business; design and production of advertisement; development and operation of online games; and provision of online music entertainment services. Tencent Holdings Limited has strategic partnerships with Dentsu Aegis Network and Ubisoft. The company was founded in 1998 and is headquartered in Shenzhen, China.
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