Analyzing Hoya (OTCMKTS:HOCPY) & Timken (NYSE:TKR)

Hoya (OTCMKTS:HOCPY) and Timken (NYSE:TKR) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Earnings and Valuation

This table compares Hoya and Timken”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hoya	$5.69 billion	8.77	$1.35 billion	$4.00	36.35
Timken	$4.57 billion	1.16	$352.70 million	$4.40	17.26

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

Risk and Volatility

Hoya has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Timken has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Profitability

This table compares Hoya and Timken’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hoya	23.57%	21.01%	16.61%
Timken	6.86%	11.78%	5.52%

Dividends

Hoya pays an annual dividend of $1.24 per share and has a dividend yield of 0.9%. Timken pays an annual dividend of $1.40 per share and has a dividend yield of 1.8%. Hoya pays out 31.0% of its earnings in the form of a dividend. Timken pays out 31.8% 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. Timken has increased its dividend for 12 consecutive years. Timken is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

0.1% of Hoya shares are held by institutional investors. Comparatively, 89.1% of Timken shares are held by institutional investors. 8.7% of Timken shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Hoya and Timken, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hoya	0	0	0	3	4.00
Timken	0	7	4	0	2.36

Timken has a consensus target price of $80.73, suggesting a potential upside of 6.27%. Given Timken’s higher probable upside, analysts plainly believe Timken is more favorable than Hoya.

Summary

Hoya beats Timken on 10 of the 18 factors compared between the two stocks.

About Hoya

HOYA Corporation, a med-tech company, provides high-tech and medical products worldwide. It operates through three segments: Life Care, Telecommunication, and Other. The company offers life care products, including eyeglass and contact lenses; medical endoscopes; intraocular lenses; laparoscopic surgical instruments; automatic endoscope cleaning equipment; and other medical related products, such as prosthetic ceramic fillers and metallic implants for orthopedics. It also operates Eyecity, a specialty retailer of contact lenses. In addition, the company provides information technology products, such as mask blanks and photomasks for manufacturing semiconductor chips; glass disks for hard disk drives; and imaging products that include optical glasses/optical lenses, colored glass filters, and laser equipment/UV light resources. Further, it engages in the research, development, manufacture, and sale of photomasks for manufacturing flat panel displays. Additionally, the company offers ReadSpeaker, a speech synthesis software; and cloud services comprising Kinnosuke, a time and attendance management service, as well as Yonosuke, an electronic payslip service. HOYA Corporation was founded in 1941 and is headquartered in Tokyo, Japan.

About Timken

The Timken Company designs, manufactures, and sells engineered bearings and industrial motion products, and related services in the United States and internationally. The company's Engineered Bearings segment provides various bearing products, including tapered, spherical, and cylindrical roller bearings; plain bearings, metal-polymer bearings, and rod end bearings; radial, angular, and precision ball bearings; thrust and specialty ball bearings; journal bearings; and housed or mounted bearings. This segment serves wind energy, agriculture, construction, food and beverage, metals and mining, automotive and truck, aerospace, rail, and other industries under the Timken, GGB, and Fafnir brands. Its Industrial Motion segment offers a portfolio of engineered products comprising industrial drives, automatic lubrication systems, linear motion products and systems, chains, belts, seals, couplings, filtration systems, and industrial clutches and brakes. It also provides industrial drivetrain and bearing repairing services. This segment serves a range of industries, such as solar energy, automation, construction, agriculture and turf, passenger rail, marine, aerospace, packaging and logistics, medical, and others under the Philadelphia Gear, Cone Drive, Rollon, Nadella, Groeneveld, BEKA, Diamond, Drives, Timken Belts, Spinea, Des-Case, Lagersmit, Lovejoy, and PT Tech brands. The Timken Company was founded in 1899 and is headquartered in North Canton, Ohio.