Financial Analysis: TOKYO ELECTRON/ADR (OTCMKTS:TOELY) vs. AXT (OTCMKTS:AXTI)

TOKYO ELECTRON/ADR (OTCMKTS:TOELY) and AXT (NASDAQ:AXTI) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Valuation and Earnings

This table compares TOKYO ELECTRON/ADR and AXT’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TOKYO ELECTRON/ADR $10.21 billion 2.46 $1.92 billion $2.88 13.31
AXT $102.40 million 1.56 $9.65 million $0.24 16.63

TOKYO ELECTRON/ADR has higher revenue and earnings than AXT. TOKYO ELECTRON/ADR is trading at a lower price-to-earnings ratio than AXT, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

57.7% of AXT shares are held by institutional investors. 7.4% of AXT shares are held by company insiders. 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.

Volatility & Risk

TOKYO ELECTRON/ADR has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, AXT has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500.

Profitability

This table compares TOKYO ELECTRON/ADR and AXT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TOKYO ELECTRON/ADR 19.56% 33.09% 21.34%
AXT 5.78% 2.97% 2.58%

Analyst Ratings

This is a summary of recent recommendations for TOKYO ELECTRON/ADR and AXT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TOKYO ELECTRON/ADR 0 1 0 0 2.00
AXT 0 0 2 0 3.00

AXT has a consensus target price of $6.25, suggesting a potential upside of 56.64%. Given AXT’s stronger consensus rating and higher probable upside, analysts clearly believe AXT is more favorable than TOKYO ELECTRON/ADR.

Dividends

TOKYO ELECTRON/ADR pays an annual dividend of $1.23 per share and has a dividend yield of 3.2%. AXT does not pay a dividend. TOKYO ELECTRON/ADR pays out 42.7% of its earnings in the form of a dividend.

Summary

TOKYO ELECTRON/ADR beats AXT on 9 of the 16 factors compared between the two stocks.

About TOKYO ELECTRON/ADR

Tokyo Electron Limited, together with its subsidiaries, develops, manufactures, distributes, and sells semiconductor and flat panel display (FPD) production equipment in Japan, North America, Europe, South Korea, Taiwan, China, and internationally. The company's Semiconductor Production Equipment segment offers coaters/developers, plasma etch systems, and single wafer deposition systems and cleaning systems used in wafer processing; wafer probers used in wafer testing process; and electrochemical deposition systems and wafer bonders/debonders used in packaging processes. Its Flat Panel Display Production Equipment segment provides coaters/developers and plasma etch/ash systems for use in the manufacture of FPDs, as well as inkjet printing systems for manufacturing OLED panels. The company also offers logistic, facility maintenance, and insurance services. Tokyo Electron Limited was founded in 1963 and is headquartered in Tokyo, Japan.

About AXT

AXT, Inc. researches, develops, and produces compound and single element semiconductor substrates. It produces semiconductor substrates using its proprietary vertical gradient freeze technology. The company offers indium phosphide (InP) for use in fiber optic lasers and detectors, passive optical networks, data center connectivity, silicon photonics, photonic integrated circuits, terrestrial solar cells, radio frequency amplifier and switching, infrared light-emitting diode (LEDs) motion control, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for applications in power amplifiers, direct broadcast television, transistors, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in 3-D sensing, data center communication, high brightness LEDs, lasers, near-infrared sensors, printer head lasers and LEDs, optical couplers, solar cells, and night vision goggles, as well as laser machining, cutting, and drilling. In addition, the company offers germanium (Ge) substrates for use in satellite solar cells, optical sensors and detectors, terrestrial concentrated photo voltaic cells, multi-junction solar cells for satellites, and infrared detectors. Further, it provides materials, including raw gallium, gallium alloys, InP poly-crystal, high purity gallium, arsenic, Ge, Ge dioxide, pyrolytic boron nitride crucibles, and boron oxide. AXT, Inc. sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was founded in 1986 and is headquartered in Fremont, California.

Receive News & Ratings for TOKYO ELECTRON/ADR Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for TOKYO ELECTRON/ADR and related companies with MarketBeat.com's FREE daily email newsletter.