Head-To-Head Review: Daikin Industries (OTCMKTS:DKILY) vs. SMC (OTCMKTS:SMCAY)

Institutional and Insider Ownership

1.0% of SMC shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Daikin Industries	6.02%	9.53%	5.29%
SMC	18.00%	7.31%	6.68%

Risk & Volatility

Daikin Industries has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, SMC has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Dividends

Daikin Industries pays an annual dividend of $0.14 per share and has a dividend yield of 1.2%. SMC pays an annual dividend of $0.23 per share and has a dividend yield of 1.5%. Daikin Industries pays out 21.9% of its earnings in the form of a dividend. SMC pays out 30.7% 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.

Earnings and Valuation

This table compares Daikin Industries and SMC”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Daikin Industries	$31.21 billion	1.12	$1.75 billion	$0.64	18.59
SMC	$5.20 billion	3.72	$1.03 billion	$0.75	20.19

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

Summary

SMC beats Daikin Industries on 8 of the 12 factors compared between the two stocks.

About Daikin Industries

Daikin Industries,Ltd. manufactures, distributes, and sells air-conditioning and refrigeration equipment, and chemical products in Japan, the Americas, China, Asia, Europe, Europe, and internationally. The company’s air-conditioning and refrigeration equipment products include room air-conditioning systems; air purifiers; heat-pump hot-water supply and room-heating systems; packaged air-conditioning systems; multiple air-conditioning systems for office buildings; air-conditioning systems for facilities and plants; heat reclaim ventilators; freezers; water chillers; turbo refrigerator equipment; air-handling units; air filters; industrial dust collectors; marine-type container refrigeration; and refrigerating and freezing showcases. The company’s chemical products comprising fluorocarbons, fluoroplastics, fluoroelastomers, fluoropaints, fluoro coating agents, semiconductor-etching products, water and oil repellent agents, pharmaceuticals and intermediates, and dry air suppliers. It also provides oil hydraulics products, including oil hydraulic pumps and valves, cooling equipment and systems, inverter-controlled pump motors, hydrostatic transmissions, and centralized lubrication units and systems; and defense products consisting of warheads, warhead parts for guided missiles, and home-use oxygen therapy equipment. In addition, the company offers after sales services. Daikin Industries,Ltd. was founded in 1924 and is headquartered in Osaka, Japan.

About SMC

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers air management system, directional control valves, air cylinders, rotatory actuators/air grippers, electric actuators/cylinders, fitting and tubing, and modular F.R.L./pressure control equipment, as well as vacuum, air preparation, and lubrication equipment. It also provides flow control equipment, speed controllers, silencers/exhaust/blow guns/pressure gauges, switches/sensors/controllers, static neutralization equipment, and industrial device communication equipment/wireless system. In addition, the company offers process valves, chemical liquid valves/fittings and needle valves/tubing, process pumps, temperature control equipment, and process gas equipment, as well as high vacuum equipment, industrial filters/sintered metal elements, and pneumatic instrumentation 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.