Financial Analysis: Nidec (OTCMKTS:NJDCY) vs. TDK (OTCMKTS:TTDKY)

TDK (OTCMKTS:TTDKY) and Nidec (OTCMKTS:NJDCY) are both large-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Earnings and Valuation

This table compares TDK and Nidec”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TDK	$14.48 billion	2.24	$1.10 billion	$0.52	32.13
Nidec	$17.12 billion	2.20	$1.11 billion	$0.23	17.17

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

Volatility & Risk

TDK has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Nidec has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TDK	6.73%	8.25%	4.13%
Nidec	6.06%	9.18%	4.79%

Analyst Ratings

This is a summary of current ratings and target prices for TDK and Nidec, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TDK	0	0	0	0	0.00
Nidec	0	1	0	0	2.00

Institutional and Insider Ownership

0.2% of Nidec shares are owned by institutional investors. 0.0% of TDK shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

TDK pays an annual dividend of $0.15 per share and has a dividend yield of 0.9%. Nidec pays an annual dividend of $0.05 per share and has a dividend yield of 1.3%. TDK pays out 28.8% 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. Nidec is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Nidec beats TDK on 9 of the 14 factors compared between the two stocks.

About TDK

TDK Corporation, together with its subsidiaries, engages in manufacture and sale of electronic components in Japan, Europe, China, Asia, the Americas, and internationally. The company operates through Passive Components, Sensor Application Products, Magnetic Application Products, Energy Application Products, and Other segments. The Passive Components segment offers ceramic capacitors, aluminum electrolytic capacitors, film capacitors, high-frequency components, piezoelectric materials, and circuit protection components, as well as inductive devices, including ferrite cores, coils, and transformers. The Sensor Application Products segment provides temperature and pressure, magnetic, and MEMS sensors. The Magnetic Application Products segment offers hard disk drives (HDD) heads, HDD suspension assemblies, and magnets. The Energy Application Products segment provides energy devices comprising rechargeable batteries, and power supplies. The Other segment provides mechatronics production equipment and camera module micro actuators for smartphones and other products. The company also engages in engages in insurance and real estate agency businesses. The company was formerly known as Tokyo Denki Kagaku Kogyo K.K. and changed its name to TDK Corporation in 1983. TDK Corporation was founded in 1935 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..