Financial Comparison: Pixelworks (NASDAQ:PXLW) vs. Tokyo Electron (OTC:TOELY)

Pixelworks (NASDAQ:PXLW) and Tokyo Electron (OTC:TOELY) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.

Risk and Volatility

Pixelworks has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Tokyo Electron has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500.

Profitability

This table compares Pixelworks and Tokyo Electron’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pixelworks	-66.47%	-111.21%	-33.20%
Tokyo Electron	22.63%	28.75%	20.52%

Analyst Recommendations

This is a breakdown of current ratings for Pixelworks and Tokyo Electron, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pixelworks	0	0	2	0	3.00
Tokyo Electron	0	0	0	1	4.00

Pixelworks presently has a consensus target price of $15.00, indicating a potential upside of 171.74%. Given Pixelworks’ higher possible upside, equities research analysts plainly believe Pixelworks is more favorable than Tokyo Electron.

Valuation & Earnings

This table compares Pixelworks and Tokyo Electron”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pixelworks	$34.25 million	0.85	-$28.72 million	($0.53)	-10.42
Tokyo Electron	$12.33 billion	6.22	$2.51 billion	$3.87	21.50

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

Insider and Institutional Ownership

21.4% of Pixelworks shares are owned by institutional investors. Comparatively, 1.3% of Tokyo Electron shares are owned by institutional investors. 4.7% of Pixelworks shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Tokyo Electron beats Pixelworks on 11 of the 15 factors compared between the two stocks.

About Pixelworks

Pixelworks, Inc., together with its subsidiaries, develops and markets semiconductor and software solutions for mobile, home and enterprise, and cinema markets in the United States, Japan, China, Taiwan, Korea, and Europe. The company offers imageprocessor integrated circuits, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing within high-end display systems; visual processor integrated circuits that works with a mobile application processor; and transcoder integrated circuits which includes software that control the operations and signal processing for converting multiple bitrates, resolutions and codecs to provide bandwidth efficient video transmissions based on industry standard protocols. It also provides software and platform licensing products comprising Pixelworks Pro Software, a software that enables development and customize the look and feel of mobile products by use of various features, such as absolute color accuracy, HDR tone mapping, SDR-to-HDR conversion, and others; and TrueCut Motion Platform, content creation tool which provides the ability to dial in a motion look on a shot-by-shot basis. The company distributes its products to integrators, branded manufacturers, and branded suppliers. Pixelworks, Inc. was founded in 1997 and is based in Portland, Oregon.

About Tokyo Electron

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.