Critical Contrast: Alps Electric (OTCMKTS:APELY) and Nidec (OTCMKTS:NJDCY)

Alps Electric (OTCMKTS:APELY) and Nidec (OTCMKTS:NJDCY) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for Alps Electric and Nidec, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alps Electric	1	1	0	0	1.50
Nidec	0	1	0	0	2.00

Risk and Volatility

Alps Electric has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500. Comparatively, Nidec has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Earnings & Valuation

This table compares Alps Electric and Nidec”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alps Electric	$6.50 billion	0.39	$249.72 million	$2.20	11.14
Nidec	$17.12 billion	2.52	$1.11 billion	$0.23	19.70

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

Dividends

Alps Electric pays an annual dividend of $0.61 per share and has a dividend yield of 2.5%. Nidec pays an annual dividend of $0.05 per share and has a dividend yield of 1.1%. Alps Electric pays out 27.7% of its earnings in the form of a dividend. Nidec pays out 21.7% 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.

Profitability

This table compares Alps Electric and Nidec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alps Electric	3.39%	1.81%	1.00%
Nidec	6.06%	9.18%	4.79%

Institutional and Insider Ownership

0.1% of Alps Electric shares are held by institutional investors. Comparatively, 0.2% of Nidec shares are held by institutional investors. 10.4% of Alps Electric shares are held by insiders. 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.

Summary

Nidec beats Alps Electric on 11 of the 14 factors compared between the two stocks.

About Alps Electric

Alps Alpine Co., Ltd. manufactures and sells electronic components in Japan and internationally. It operates through four segments: Components, Sensor Communication, Module Systems, and Logistics. The company’s products for the consumer, industrial equipment, and IoT markets include TACT switches, worker condition monitoring systems, HAPTIC reactor, actuator for cameras, remote monitoring system for logistics, analog meter monitoring system, resistive position sensor, pressure sensor, air environment sensor module, three-axis geomagnetic sensor, humidity sensor, and pc board mount current sensor. Its products for the automotive market comprises TACT and detector switches, Encoder, aspherical glass lens with metal holder, HAPTIC reactor, trimagic converter, current sensor, magnetic sensor, millimeter-wave sensor, GNSS module, 5G NR module, power window switch, electric shifter, sound system, cabin controller, smart door trim, electric shifter, integrated display, premium sound speakers, and customized car products. The company also provides systems development, office, and financing and leasing services, as well as transportation, storage, and forwarding services. The company was formerly known as Alps Electric Co., Ltd. and changed its name to Alps Alpine Co., Ltd. in January 2019. The company was incorporated in 1948 and is headquartered in Tokyo, Japan.

About Nidec

Nidec Corporation, together with its subsidiaries, develops, manufactures, and sells motors, electronics and optical components, and other related products in Japan and internationally. The company offers medium- and large-size motors, small-size and precision motors, motor-related products, units and modules, automotive components, mechanical equipment/machine tools, inspection and measuring equipment, electronic devices, sensors, and other products, as well as mold, molding, cutting, and machining components. Its products are used for applications in robotics, IoT products, automotive components, home appliances, logistics/agriculture, information technology, office automation, mobile optical components, medical and health care products, housing equipment, commercial and professional products, industrial machinery, and processing/inspection equipment. The company was incorporated in 1973 and is headquartered in Kyoto, Japan..