Analyzing SMC (OTCMKTS:SMCAY) and Disco (OTCMKTS:DSCSY)

SMC (OTCMKTS:SMCAYGet Rating) and Disco (OTCMKTS:DSCSYGet Rating) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, risk, valuation, earnings, profitability and institutional ownership.

Risk and Volatility

SMC has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Disco has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Dividends

SMC pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Disco pays an annual dividend of $1.42 per share and has a dividend yield of 3.0%. SMC pays out 18.6% of its earnings in the form of a dividend. Disco pays out 48.6% 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.

Profitability

This table compares SMC and Disco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SMC 26.49% 12.89% 11.45%
Disco 24.94% 22.73% 17.08%

Analyst Recommendations

This is a breakdown of current ratings for SMC and Disco, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SMC 0 0 0 0 N/A
Disco 1 0 1 0 2.00

Earnings & Valuation

This table compares SMC and Disco’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SMC $6.48 billion 4.92 $1.72 billion $1.29 18.33
Disco $1.73 billion 4.89 $367.45 million $2.92 16.00

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

About SMC

(Get Rating)

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers directional control valves, air cylinders, rotary actuators/air grippers, electric actuators/cylinders, vacuum equipment, air preparation equipment, modular F.R.L./pressure control equipment, lubrication equipment, fittings and tubings, flow control equipment, speed controllers, silencers/exhaust cleaners/blow guns/pressure gauges, switches/sensors/controllers, and static neutralization equipment. It also provides process valves, chemical liquid valves/fittings and needle valves/tubings, process pumps, temperature control equipment, process gas equipment, high vacuum equipment, industrial filters/sintered metal elements, pneumatic instrumentation equipment, and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.

About Disco

(Get Rating)

Disco Corporation manufactures and sells precision cutting, grinding, and polishing machines in Japan and internationally. The company's precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws, as well as products for dicing before grinding process and package singulation. It also offers precision processing tools comprising dicing blades, grinding wheels, and dry polishing wheels; and other products, such as accessory equipment, as well as frames and cassettes, and additives for cutting waters. In addition, the company is involved in the disassembly and recycling of precision cutting, grinding, and polishing machines, as well as provides training services for the maintenance and operation of its products. Further, it leases precision machines; and purchases and sells used machines. The company was founded in 1937 and is headquartered in Tokyo, Japan.

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