Financial Contrast: Fujitsu (OTCMKTS:FJTSY) and Disco (OTCMKTS:DSCSY)

Fujitsu (OTCMKTS:FJTSY) and Disco (OTCMKTS:DSCSY) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for Fujitsu and Disco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fujitsu	0	0	0	0	N/A
Disco	0	0	0	0	N/A

Earnings and Valuation

This table compares Fujitsu and Disco’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fujitsu	$26.02 billion	1.22	$1.76 billion	$0.50	33.64
Disco	$2.13 billion	20.32	$581.02 million	$0.54	73.96

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

Risk & Volatility

Fujitsu has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Disco has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Profitability

This table compares Fujitsu and Disco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fujitsu	6.78%	13.97%	7.70%
Disco	27.32%	24.30%	17.99%

Insider and Institutional Ownership

0.1% of Fujitsu shares are owned by institutional investors. Comparatively, 0.0% of Disco shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Fujitsu pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. Disco pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Fujitsu pays out 20.0% of its earnings in the form of a dividend. Disco pays out 37.0% 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. Fujitsu is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Disco beats Fujitsu on 7 of the 12 factors compared between the two stocks.

About Fujitsu

Fujitsu Limited operates as an information and communication technology company in Japan and internationally. The company operates through three segments: Technology Solutions, Ubiquitous Solutions, and Device Solutions. The company offers multi cloud and hybrid IT services; assessment and consultative services; SAP landscape transformation services; new workplace; datacentre products comprising integrated systems, storage solutions, servers, network switches, and infrastructure management; workplace products including notebooks, tablet PC's, desktop PC's, workstations, thin clients, displays, and peripheral devices; consumption based IT services; installation and implementation services; and hardware, software, and infrastructure support services, as well as electronic devices, air conditioning products, and network solutions. It also provides cyber security solutions, including cyber security consulting, managed security servies, and security operation and advanced threat centers; internet of things, artificial intelligence platform and solutions; and software products comprising FUJITSU Software Infrastructure Manager and FUJITSU Software ServerView Suite. Further, the company offers electronic components, such as semiconductor packages and batteries. It serves automotive, manufacturing, retail, financial services, transport, telecommunications, healthcare, and energy and utilities industries; the public sectors; and services providers. The company was founded in 1923 and is headquartered in Tokyo, Japan.

About Disco

Disco Corporation manufactures and sells precision cutting, grinding, and polishing machines in Japan and internationally. Its precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws. The company also offers precision processing tools, such as dicing blades, grinding wheels, and dry polishing wheels; and other products, such as accessory equipment. In addition, it is involved in the disassembly and recycling of precision cutting, grinding, and polishing machines, as well as provides training services for the maintenance and operation of its products. Further, the company leases precision machines; and purchases and sells used machines. Additionally, it manufactures precision diamond abrasive tools, as well as offers chargeable processing services. The company was founded in 1937 and is headquartered in Tokyo, Japan.