The9 (NASDAQ:NCTY) and CDK Global (NASDAQ:CDK) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Institutional & Insider Ownership

0.9% of The9 shares are held by institutional investors. Comparatively, 84.7% of CDK Global shares are held by institutional investors. 30.8% of The9 shares are held by company insiders. Comparatively, 0.5% of CDK Global shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

The9 has a beta of 2.29, meaning that its share price is 129% more volatile than the S&P 500. Comparatively, CDK Global has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Profitability

This table compares The9 and CDK Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The9 N/A N/A N/A
CDK Global 16.36% -135.00% 15.59%

Valuation & Earnings

This table compares The9 and CDK Global’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The9 $11.24 million 1.08 -$18.16 million N/A N/A
CDK Global $2.27 billion 3.22 $380.80 million $3.04 19.30

CDK Global has higher revenue and earnings than The9.

Analyst Ratings

This is a breakdown of current recommendations and price targets for The9 and CDK Global, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The9 0 0 0 0 N/A
CDK Global 0 2 2 0 2.50

CDK Global has a consensus target price of $69.67, indicating a potential upside of 18.76%. Given CDK Global’s higher possible upside, analysts plainly believe CDK Global is more favorable than The9.

Dividends

CDK Global pays an annual dividend of $0.60 per share and has a dividend yield of 1.0%. The9 does not pay a dividend. CDK Global pays out 19.7% of its earnings in the form of a dividend. CDK Global has increased its dividend for 4 consecutive years.

Summary

CDK Global beats The9 on 10 of the 14 factors compared between the two stocks.

The9 Company Profile

The9 Limited, together with its subsidiaries, operates as an online game developer and operator in the People’s Republic of China. The company offers online games, including massively multiplayer online games, mobile games, Web games, and TV games. It also provides training services, such as smartphone application programming training services to college students. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was founded in 1999 and is headquartered in Shanghai, the People’s Republic of China.

CDK Global Company Profile


CDK Global, Inc. provides software and technology solutions for automotive retailers in the United States and internationally. The company operates through Retail Solutions North America, Advertising North America, and CDK International segments. The company offers Dealer Management System (DMS), a portfolio of layered software applications and services for automotive retailers, original equipment manufacturers (OEMs), consumers, and other industry participants manage the acquisition, sale, financing, insuring, parts supply, and repair and maintenance of vehicles. It also provides solutions to retailers and manufacturers of heavy trucks, construction equipment, agricultural equipment, motorcycles, boats, and other marine and recreational vehicles. In addition, the company offers advertising solutions, such as the management of digital advertising spend for automotive retailers, automotive retailer associations, and OEMs; and professional services, custom programming, consulting, implementation, and training solutions, as well as customer support solutions. It serves approximately 28,000 retail locations and OEMs. CDK Global, Inc. is headquartered in Hoffman Estates, Illinois.

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