Reviewing Ricoh (OTCMKTS:RICOY) and HP (NYSE:HPQ)

HP (NYSE:HPQ) and Ricoh (OTCMKTS:RICOY) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Analyst Ratings

This is a summary of current ratings and target prices for HP and Ricoh, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HP	5	8	0	2	1.93
Ricoh	0	0	0	0	0.00

HP presently has a consensus target price of $23.33, suggesting a potential downside of 22.26%. Given HP’s stronger consensus rating and higher probable upside, equities research analysts plainly believe HP is more favorable than Ricoh.

Profitability

This table compares HP and Ricoh’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HP	4.45%	-581.36%	7.55%
Ricoh	3.10%	6.98%	3.24%

Dividends

HP pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. Ricoh pays an annual dividend of $0.15 per share and has a dividend yield of 1.6%. HP pays out 44.3% of its earnings in the form of a dividend. Ricoh pays out 16.0% 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. HP has raised its dividend for 15 consecutive years. HP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares HP and Ricoh”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HP	$55.30 billion	0.50	$2.53 billion	$2.71	11.08
Ricoh	$17.33 billion	0.31	$367.42 million	$0.94	10.01

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

Insider & Institutional Ownership

77.5% of HP shares are held by institutional investors. 0.2% of HP shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

HP has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Ricoh has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Summary

HP beats Ricoh on 15 of the 17 factors compared between the two stocks.

About HP

HP Inc. provides products, technologies, software, solutions, and services to individual consumers, small- and medium-sized businesses, and large enterprises, including customers in the government, health, and education sectors worldwide. It operates through Personal Systems and Printing segments. The Personal Systems segment offers commercial personal computers (PCs), consumer PCs, workstations, thin clients, commercial tablets and mobility devices, retail point-of-sale systems, displays and other related accessories, software, support, and services for the commercial and consumer markets. The Printing segment provides consumer and commercial printer hardware, supplies, media, solutions, and services, as well as scanning devices; and laserJet and enterprise, inkjet and printing, graphics, and 3D printing solutions. The company was formerly known as Hewlett-Packard Company and changed its name to HP Inc. in October 2015. HP Inc. was founded in 1939 and is headquartered in Palo Alto, California.

About Ricoh

Ricoh Company, Ltd. provides office, commercial printing, and related solutions worldwide. It operates through Digital services, Digital Products, Graphic Communications, Industrial Solutions, and Other segments. The company sells multifunctional printers (MFPs), laser printers, digital duplicators, wide format printers, facsimile machines, scanners, personal computers, servers, network equipment, related parts and supplies, services, and support and service and solutions related to documents. It also offers production and OEM services for MFPs, laser printers, digital duplicators, wide format printers, facsimile machine, scanners, network equipment, and related parts and supplies. In addition, the company produces and sells cut sheet printers, continuous feed printers, inkjet heads, imaging systems, industrial printers, related parts and supplies, services, and support and software. Further, it produces and sells thermal paper and media products, industrial optical components/modules, and electronic components and precision mechanical components, as well as offers digital cameras, 360°cameras, and environment and healthcare products. The company was formerly known as Riken Optical Co., Ltd. and changed its name to Ricoh Company, Ltd. in 1963. Ricoh Company, Ltd. was incorporated in 1936 and is headquartered in Tokyo, Japan.