Critical Analysis: Tokyo Electron (TOELY) and The Competition

Tokyo Electron (OTC:TOELY) is one of 173 public companies in the “Semiconductors & related devices” industry, but how does it weigh in compared to its rivals? We will compare Tokyo Electron to related companies based on the strength of its profitability, valuation, earnings, analyst recommendations, dividends, risk and institutional ownership.

Risk & Volatility

Tokyo Electron has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500. Comparatively, Tokyo Electron’s rivals have a beta of 1.60, meaning that their average stock price is 60% more volatile than the S&P 500.

Dividends

Tokyo Electron pays an annual dividend of $1.26 per share and has a dividend yield of 1.7%. Tokyo Electron pays out 33.6% of its earnings in the form of a dividend. As a group, “Semiconductors & related devices” companies pay a dividend yield of 1.6% and pay out 47.4% of their earnings in the form of a dividend. Tokyo Electron is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

1.3% of Tokyo Electron shares are held by institutional investors. Comparatively, 57.2% of shares of all “Semiconductors & related devices” companies are held by institutional investors. 10.0% of shares of all “Semiconductors & related devices” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Tokyo Electron and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tokyo Electron	0	0	0	1	4.00
Tokyo Electron Competitors	2527	10086	19773	706	2.56

As a group, “Semiconductors & related devices” companies have a potential upside of 649.98%. Given Tokyo Electron’s rivals higher probable upside, analysts plainly believe Tokyo Electron has less favorable growth aspects than its rivals.

Earnings & Valuation

This table compares Tokyo Electron and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Tokyo Electron	$12.33 billion	$2.51 billion	19.49
Tokyo Electron Competitors	$29.53 billion	$592.42 million	54.69

Tokyo Electron’s rivals have higher revenue, but lower earnings than Tokyo Electron. Tokyo Electron is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Tokyo Electron and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tokyo Electron	22.63%	28.75%	20.52%
Tokyo Electron Competitors	-470.17%	-79.71%	-11.21%

Summary

Tokyo Electron beats its rivals on 8 of the 15 factors compared.

Tokyo Electron Company Profile

Tokyo Electron Limited, together with its subsidiaries, develops, manufactures, and sells semiconductor and flat panel display (FPD) production equipment in Japan, Europe, North America, Taiwan, China, South Korea, Southeast Asia, and internationally. The company offers coaters/developers, etch systems, surface preparation systems, deposition systems, test systems, wafer bonders/debonders, wafer edge trimming, SiC epitaxial CVD systems, gas cluster ion beam system, and cleaning systems. It also provides plasma etch/ash systems for use in the manufacture of FPDs, as well as inkjet printing systems for manufacturing OLED displays. In addition, the company offers delivery, facility management, and non-life insurance services; sells semiconductor products, board computer products, software, and other electronic components; sells and supports network/storage/middleware related solutions; and develops, manufactures, and sells magnetic annealing systems. Tokyo Electron Limited was incorporated in 1951 and is headquartered in Tokyo, Japan.