Investors looking for an international growth stock to pepper their returns and diversify their portfolios had no problem flocking to Baidu (NASDAQ:BIDU) or MercadoLibre (NASDAQ:MELI) a few years ago. China's top dog in online search and Latin America's leading online marketplace were market darlings and tech bellwethers, delivering game-altering wealth to early believers. 

The climate isn't as kind these days. MercadoLibre is trading slightly lower than where it was a year ago, and those shareholders are the lucky ones. Baidu stock has shed a third of its value over the past year, as China's slowing economy and other factors have weighed on investor interest in the internet juggernaut. One stock is lukewarm, and the other has grown cold, but let's take a deeper dive to see which one has the best chance to heat up.

MercadoLibre logo in a heart at a developers conference.

Image source: MercadoLibre.

Returning to glory

Baidu had a great shot to win back investor confidence on Thursday, when it posted its fourth-quarter results, but unfortunately it came through with mixed results. Revenue grew at a better-than-expected 22% -- or 28% adjusted for businesses that it has sold over the past year -- but adjusted earnings declined by 17% for the quarter. Baidu also warned that growth will decelerate in the current quarter. 

MercadoLibre doesn't report until shortly after Tuesday's close, but investors are bracing for a rough update. Analysts see a 6% decline in reported revenue, though there is always more than meets the eye with MercadoLibre, given the heady inflation and geopolitical events in key Latin American countries. Even an accounting change on how it records shipping subsidies is depressing top-line results. Reported revenue rose 17% in the third quarter, but the increase was actually a whopping 58% on a foreign exchange-neutral basis. Analysts are eyeing a narrowing deficit, but it has missed Wall Street profit targets in three of the past four quarters. 

Things aren't rosy on either front, but the big picture remains brighter than the unappetizing stock charts over the past year. Baidu remains the undisputed leader in China, and trade tensions that have been weighing on investors' interest in Chinese growth stocks and the country's own economic slowdown won't last forever. MercadoLibre continues to grow its reach through Latin America. The country-specific issues may have a trickier fix than Baidu, but regulatory hurdles aren't as high. 

It's easy to see both stocks beating the market from the current depressed starting lines, but Baidu is the safer bet to outperform. Baidu continues to post double-digit revenue growth. It's now fetching less than 17 times forward earnings, and that multiple drops to 13 as we look ahead to 2020. MercadoLibre should return to profitability this year, but it's too early to begin valuing the marketplace operator on an earnings basis. The year ahead should be better for investors in both stocks than the past 12 months have been, but Baidu is positioned to be the better bet at this point.