Texas Instruments (NASDAQ:TXN) and Tokyo Electron (OTCMKTS:TOELY) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.
Risk and Volatility
Texas Instruments has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, Tokyo Electron has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.
Dividends
Texas Instruments pays an annual dividend of $4.08 per share and has a dividend yield of 2.1%. Tokyo Electron pays an annual dividend of $1.36 per share and has a dividend yield of 1.2%. Texas Instruments pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tokyo Electron pays out 50.6% of its earnings in the form of a dividend. Texas Instruments has raised its dividend for 17 consecutive years. Texas Instruments is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Texas Instruments and Tokyo Electron, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Texas Instruments | 4 | 8 | 15 | 0 | 2.41 |
Tokyo Electron | 0 | 1 | 1 | 0 | 2.50 |
Texas Instruments currently has a consensus target price of $170.5926, indicating a potential downside of 12.71%. Given Texas Instruments' higher possible upside, equities analysts clearly believe Texas Instruments is more favorable than Tokyo Electron.
Profitability
This table compares Texas Instruments and Tokyo Electron's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Texas Instruments | 36.24% | 61.05% | 28.06% |
Tokyo Electron | N/A | N/A | N/A |
Institutional & Insider Ownership
83.1% of Texas Instruments shares are owned by institutional investors. Comparatively, 1.0% of Tokyo Electron shares are owned by institutional investors. 0.7% of Texas Instruments shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Texas Instruments and Tokyo Electron's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Texas Instruments | $14.38 billion | 12.50 | $5.02 billion | $5.24 | 37.30 |
Tokyo Electron | $10.37 billion | 6.88 | $1.70 billion | $2.69 | 42.19 |
Texas Instruments has higher revenue and earnings than Tokyo Electron. Texas Instruments is trading at a lower price-to-earnings ratio than Tokyo Electron, indicating that it is currently the more affordable of the two stocks.
Summary
Texas Instruments beats Tokyo Electron on 13 of the 17 factors compared between the two stocks.