Deswell Industries (NASDAQ:DSWL) vs. Nidec (OTCMKTS:NJDCY) Financial Contrast

Deswell Industries (NASDAQ:DSWL) and Nidec (OTCMKTS:NJDCY) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Deswell Industries and Nidec, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Deswell Industries	0	0	1	0	3.00
Nidec	0	2	0	0	2.00

Dividends

Deswell Industries pays an annual dividend of $0.20 per share and has a dividend yield of 5.6%. Nidec pays an annual dividend of $0.02 per share and has a dividend yield of 0.6%. Deswell Industries pays out 41.7% of its earnings in the form of a dividend. Nidec pays out 7.7% 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.

Earnings & Valuation

This table compares Deswell Industries and Nidec”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Deswell Industries	$67.61 million	0.85	$11.14 million	$0.48	7.50
Nidec	$17.12 billion	1.73	$1.11 billion	$0.26	11.96

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

Insider & Institutional Ownership

0.2% of Nidec shares are owned by institutional investors. 39.0% of Deswell Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Deswell Industries and Nidec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Deswell Industries	N/A	N/A	N/A
Nidec	6.82%	10.15%	5.24%

Volatility & Risk

Deswell Industries has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Nidec has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Summary

Nidec beats Deswell Industries on 10 of the 15 factors compared between the two stocks.

About Deswell Industries

Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers in China, the United States, Europe, Hong Kong, the United Kingdom, Canada, and internationally. It operates through two segments, Plastic Injection Molding and Electronic Products Assembling. The company produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, printers, scanners; parts for industrial components, and indoor control switches, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps; parts for medical products comprising apparatus for blood tests; laser key caps; automobile components; and plastic components of automatic robot. It also provides electronic products that consist of audio equipment, including digital and analogue audio mixers, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, wired and wireless audio streaming products, and headphones; printed circuit board assemblies; and medical products. The company was founded in 1987 and is based in Macau.

About Nidec

Nidec Corporation, together with its subsidiaries, develops, manufactures, and sells motors, electronics and optical components, and other related products in Japan and internationally. The company offers medium- and large-size motors, small-size and precision motors, motor-related products, units and modules, automotive components, mechanical equipment/machine tools, inspection and measuring equipment, electronic devices, sensors, and other products, as well as mold, molding, cutting, and machining components. Its products are used for applications in robotics, IoT products, automotive components, home appliances, logistics/agriculture, information technology, office automation, mobile optical components, medical and health care products, housing equipment, commercial and professional products, industrial machinery, and processing/inspection equipment. The company was incorporated in 1973 and is headquartered in Kyoto, Japan..