Financial Review: SMC (OTCMKTS:SMCAY) & Hoya (OTCMKTS:HOCPY)

Hoya (OTCMKTS:HOCPY) and SMC (OTCMKTS:SMCAY) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.

Profitability

This table compares Hoya and SMC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hoya	23.33%	21.01%	16.56%
SMC	19.72%	7.87%	7.16%

Insider and Institutional Ownership

0.1% of Hoya shares are owned by institutional investors. Comparatively, 1.0% of SMC shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Hoya pays an annual dividend of $1.23 per share and has a dividend yield of 0.8%. SMC pays an annual dividend of $0.19 per share and has a dividend yield of 1.1%. Hoya pays out 30.1% of its earnings in the form of a dividend. SMC pays out 22.6% 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. SMC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Hoya has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, SMC has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Valuation and Earnings

This table compares Hoya and SMC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hoya	$5.69 billion	9.14	$1.35 billion	$4.08	37.12
SMC	$5.20 billion	4.41	$1.03 billion	$0.84	21.37

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

Analyst Recommendations

This is a summary of recent ratings and target prices for Hoya and SMC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hoya	0	0	0	3	4.00
SMC	0	1	0	0	2.00

Summary

Hoya beats SMC on 11 of the 14 factors compared between the two stocks.

About Hoya

HOYA Corporation, a med-tech company, provides high-tech and medical products worldwide. It operates through three segments: Life Care, Telecommunication, and Other. The company offers life care products, including eyeglass and contact lenses; medical endoscopes; intraocular lenses; laparoscopic surgical instruments; automatic endoscope cleaning equipment; and other medical related products, such as prosthetic ceramic fillers and metallic implants for orthopedics. It also operates Eyecity, a specialty retailer of contact lenses. In addition, the company provides information technology products, such as mask blanks and photomasks for manufacturing semiconductor chips; glass disks for hard disk drives; and imaging products that include optical glasses/optical lenses, colored glass filters, and laser equipment/UV light resources. Further, it engages in the research, development, manufacture, and sale of photomasks for manufacturing flat panel displays. Additionally, the company offers ReadSpeaker, a speech synthesis software; and cloud services comprising Kinnosuke, a time and attendance management service, as well as Yonosuke, an electronic payslip service. HOYA Corporation was founded in 1941 and is headquartered in Tokyo, Japan.

About SMC

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers air management system, directional control valves, air cylinders, rotatory actuators/air grippers, electric actuators/cylinders, fitting and tubing, and modular F.R.L./pressure control equipment, as well as vacuum, air preparation, and lubrication equipment. It also provides flow control equipment, speed controllers, silencers/exhaust/blow guns/pressure gauges, switches/sensors/controllers, static neutralization equipment, and industrial device communication equipment/wireless system. In addition, the company offers process valves, chemical liquid valves/fittings and needle valves/tubing, process pumps, temperature control equipment, and process gas equipment, as well as high vacuum equipment, industrial filters/sintered metal elements, and pneumatic instrumentation and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.