Critical Survey: Nihon Kohden (OTCMKTS:NHNKY) versus Secom (OTCMKTS:SOMLY)

Nihon Kohden (OTCMKTS:NHNKY) and Secom (OTCMKTS:SOMLY) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Insider & Institutional Ownership

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

Earnings and Valuation

This table compares Nihon Kohden and Secom’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nihon Kohden	$1.54 billion	N/A	$117.94 million	$0.69	21.86
Secom	$8.00 billion	1.70	$706.22 million	$0.84	17.38

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

Risk & Volatility

Nihon Kohden has a beta of -0.08, suggesting that its stock price is 108% less volatile than the S&P 500. Comparatively, Secom has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Profitability

This table compares Nihon Kohden and Secom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nihon Kohden	7.66%	15.08%	11.90%
Secom	8.85%	7.55%	5.08%

Analyst Recommendations

This is a summary of recent ratings for Nihon Kohden and Secom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nihon Kohden	0	0	0	0	N/A
Secom	0	0	0	0	N/A

Dividends

Nihon Kohden pays an annual dividend of $0.07 per share and has a dividend yield of 0.5%. Secom pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. Nihon Kohden pays out 10.1% of its earnings in the form of a dividend. Secom pays out 11.9% 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.

Summary

Secom beats Nihon Kohden on 6 of the 11 factors compared between the two stocks.

About Nihon Kohden

Nihon Kohden Corporation engages in development, manufacturing, sale, maintenance, and consultation of medical electronic equipment, and related systems and products in Japan, Americas, Europe, rest of Asia, and internationally. It offers physiological measuring equipment comprising electrocardiographs, electroencephalographs, and polygraphs for Cath-labs; patient monitoring systems, such as beside and central monitors; and treatment equipment including defibrillators, automated external defibrillators, ventilators, and pacemakers. The company also provides medical support system, which includes diagnostic and clinical information system; and in-vitro diagnostic equipment comprising hematology and clinical chemistry analyzers. In addition, it operates insurance brokerage and technology licensing business. The company was incorporated in 1951 and is headquartered in Shinjuku, Japan.

About Secom

SECOM CO., LTD., together with its subsidiaries, provides security services in Japan and internationally. The company operates through Security Services, Fire Protection Services, Medical Services, Insurance Services, Geospatial Information Services, BPO and ICT Services, and Other Services. The Security Services segment offers static guard, armored car, merchandise, and other services, as well as online security systems. The Fire Protection Services segment provides fire alarm systems, fire extinguishing systems, and maintenance services to office buildings, production facilities, tunnels, cultural properties, ships, and residences. The Medical Services segment offers home nursing, pharmaceutical dispensing, home delivery services, health and preventative care services, and personal and outpatient care services; and cloud-based medical reporting services and SECOM LINKus application. This segment also operates the general hospital and residences for seniors; and sells medical equipment and pharmaceuticals. The Insurance Services Segment provides fire insurance, automobile insurance, and cancer treatment insurance services. The Geospatial Information Services segment offers geospatial information services to public-sector entities, such as national and local governments; private sector customers; and overseas government agencies. The BPO and ICT Services segment provides contact centers and back office support services, data center, disaster preparedness, information security, and cloud-based services, as well as SaaS solutions. The Other Services segment offers real estate leasing, construction, and installation services. The company was incorporated in 1962 and is headquartered in Tokyo, Japan.