Comparing iQIYI (NASDAQ:IQ) and GigaMedia (NASDAQ:GIGM)

iQIYI (NASDAQ:IQ) and GigaMedia (NASDAQ:GIGM) are both small-cap communication services companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.

Volatility and Risk

iQIYI has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, GigaMedia has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
iQIYI	-3.24%	-6.29%	-1.78%
GigaMedia	-43.36%	-5.36%	-5.02%

Insider & Institutional Ownership

52.7% of iQIYI shares are held by institutional investors. Comparatively, 13.5% of GigaMedia shares are held by institutional investors. 57.8% of iQIYI shares are held by company insiders. Comparatively, 1.0% of GigaMedia shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for iQIYI and GigaMedia, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
iQIYI	1	4	1	0	2.00
GigaMedia	1	0	0	0	1.00

iQIYI presently has a consensus price target of $1.73, indicating a potential upside of 67.96%. Given iQIYI’s stronger consensus rating and higher probable upside, analysts plainly believe iQIYI is more favorable than GigaMedia.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
iQIYI	$3.80 billion	0.26	-$29.50 million	($0.12)	-8.58
GigaMedia	$3.47 million	4.39	-$1.55 million	($0.18)	-7.67

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

Summary

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

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.

About GigaMedia

GigaMedia Limited, together with its subsidiaries, provides digital entertainment services in Taiwan, Hong Kong, and Macau. The company owns and operates FunTown, a digital entertainment portal that offers mobile and browser-based casual games, as well as provides services such as player clubs, tournaments, avatars, friends and family messenger and online chatting systems, customer service, mobile platform, and customer platform. It also offers MahJong, a traditional Chinese tile-based game; casual card and table games; online card games; and chance-based games, including bingo, lotto, horse racing, Sic-Bo, slots, and other casual games. In addition, the company provides role-playing and sports games, such as Tales Runner, a multi-player online obstacle running game; Yume 100, a story-based game that targets female players; Akaseka, a female-oriented game; and Shinobi Master New Link, a male-oriented game. GigaMedia Limited was founded in 1998 and is headquartered in Taipei, Taiwan.