Contrasting Seagate Technology (NASDAQ:STX) and Canon (OTCMKTS:CAJPY)

Canon (OTCMKTS:CAJPY) and Seagate Technology (NASDAQ:STX) are both large-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Dividends

Canon pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. Seagate Technology pays an annual dividend of $2.96 per share and has a dividend yield of 0.4%. Canon pays out 31.5% of its earnings in the form of a dividend. Seagate Technology pays out 21.3% 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. Seagate Technology has raised its dividend for 1 consecutive years.

Insider and Institutional Ownership

92.9% of Seagate Technology shares are held by institutional investors. 0.0% of Canon shares are held by company insiders. Comparatively, 0.5% of Seagate Technology shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Canon and Seagate Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canon	7.36%	9.41%	5.53%
Seagate Technology	26.11%	369.98%	37.58%

Analyst Ratings

This is a summary of current recommendations and price targets for Canon and Seagate Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canon	0	1	0	0	2.00
Seagate Technology	0	5	22	0	2.81

Seagate Technology has a consensus target price of $986.00, indicating a potential upside of 22.39%. Given Seagate Technology’s stronger consensus rating and higher possible upside, analysts clearly believe Seagate Technology is more favorable than Canon.

Risk & Volatility

Canon has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Seagate Technology has a beta of 2.06, indicating that its share price is 106% more volatile than the S&P 500.

Earnings & Valuation

This table compares Canon and Seagate Technology”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canon	$29.46 billion	0.88	$2.22 billion	$2.54	11.56
Seagate Technology	$12.20 billion	15.02	$3.18 billion	$13.88	58.04

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

Summary

Seagate Technology beats Canon on 15 of the 17 factors compared between the two stocks.

About Canon

Canon Inc., together with its subsidiaries, manufactures and sells office multifunction devices (MFDs), plain paper copying machines, laser and inkjet printers, cameras, diagnostic equipment, and lithography equipment. The company operates through four segments: Printing Business Unit, Imaging Business Unit, Medical Business Unit, and Industrial and Others Business Unit. The Printing Business Unit segment offers office MFDs, document solutions, laser multifunction printers, laser printers, inkjet printers, image scanners, calculators, digital continuous feed presses, digital sheet-fed presses, and large format printers. The Imaging Business Unit segment provides interchangeable-lens digital cameras, digital compact cameras, interchangeable lenses, compact photo printers, network cameras, video management and video content analytics software, digital camcorders, digital cinema cameras, broadcast equipment, and multimedia projectors. The Medical System Business Unit segment offers computed tomography systems, diagnostic ultrasound systems, diagnostic X-ray systems, magnetic resonance imaging systems, clinical chemistry analyzers, digital radiography systems, and ophthalmic equipment. The Industry and Others Business Unit segment provides semiconductor lithography equipment, flat panel display lithography equipment, vacuum thin-film deposition equipment, organic light-emitting diode display manufacturing equipment, die bonders, handy terminals, and document scanners. The company also provides maintenance services; and supplies replacement drums, parts, toners, and papers. It sells its products under the Canon brand through subsidiaries or independent distributors to dealers and retail outlets, as well as directly to end-users globally. Canon Inc. was founded in 1933 and is headquartered in Tokyo, Japan.

About Seagate Technology

Seagate Technology Holdings plc provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally. It provides mass capacity storage products, including enterprise nearline hard disk drives (HDDs), enterprise nearline solid state drives (SSDs), enterprise nearline systems, video and image HDDs, and network-attached storage drives. The company also offers legacy applications comprising Mission Critical HDDs and SSDs; external storage solutions under the Seagate Ultra Touch, One Touch, and Expansion product lines, as well as under the LaCie brand name; desktop drives; notebook drives, DVR HDDs, and gaming SSDs. In addition, it provides Lyve edge-to-cloud mass capacity platform. The company sells its products primarily to OEMs, distributors, and retailers. Seagate Technology Holdings plc was founded in 1978 and is based in Dublin, Ireland.