Head to Head Review: STMicroelectronics (NYSE:STM) versus THK (OTCMKTS:THKLY)

THK (OTCMKTS:THKLY) and STMicroelectronics (NYSE:STM) 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, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for THK and STMicroelectronics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
THK	0	0	0	1	4.00
STMicroelectronics	1	8	4	1	2.36

STMicroelectronics has a consensus price target of $29.67, suggesting a potential downside of 1.39%. Given STMicroelectronics’ higher possible upside, analysts plainly believe STMicroelectronics is more favorable than THK.

Volatility and Risk

THK has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, STMicroelectronics has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500.

Profitability

This table compares THK and STMicroelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
THK	2.48%	2.34%	1.57%
STMicroelectronics	8.94%	6.28%	4.43%

Dividends

THK pays an annual dividend of $0.55 per share and has a dividend yield of 4.0%. STMicroelectronics pays an annual dividend of $0.31 per share and has a dividend yield of 1.0%. THK pays out 239.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. STMicroelectronics pays out 26.3% of its earnings in the form of a dividend.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
THK	$2.33 billion	1.54	$68.90 million	$0.23	60.21
STMicroelectronics	$13.27 billion	2.04	$1.56 billion	$1.18	25.50

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

Insider and Institutional Ownership

5.1% of STMicroelectronics shares are held by institutional investors. 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.

Summary

STMicroelectronics beats THK on 12 of the 15 factors compared between the two stocks.

About THK

THK Co., Ltd. engages in the manufacture and sale of mechanical components worldwide. The company provides linear motion (LM) guides, ball screws, ball splines, LM guide actuators, cross roller rings/ double row angular contact ring, electric actuators, linear motor actuators, cam followers, roller followers, linear bushes, LM strokes, slide packs, slide rails, cross roller guides and tables, linear ball slides, LM and flat rollers, spline nuts, screw nuts, change nuts, precision linear packs, link balls, rod ends, spherical plain bearings, lubrication accessories, and seismic isolation products. Its products are used in various applications, including machine tools, general industrial machinery, precision instruments, semiconductor and LCD manufacturing equipment, industrial robots, electronic devices, and transport systems, as well as in construction, aerospace, medical and assistive, and other manufacturing industries. The company was incorporated in 1946 and is headquartered in Tokyo, Japan.

About STMicroelectronics

STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments. The Automotive and Discrete Group segment offers automotive integrated circuits (ICs), and discrete and power transistor products. The Analog, MEMS and Sensors Group segment provides industrial application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs); general purpose analog products; custom analog ICs; wireless charging solutions; galvanic isolated gate drivers; low and high voltage amplifiers, comparators, and current-sense amplifiers; MasterGaN, a solution that integrates a silicon driver and GaN power transistors in a single package; wireline and wireless connectivity ICs; touch screen controllers; micro-electro-mechanical systems (MEMS) products, including sensors or actuators; and optical sensing solutions. The Microcontrollers and Digital ICs Group segment offers general purpose and secure microcontrollers; and radio frequency (RF) products. It also offers application-specific standard products for analog, digital and mixed-signal applications. In addition, the company provides assembly and other services. It sells its products through distributors and retailers, as well as through sales representatives. The company serves automotive, industrial, personal electronics and communications equipment, and computers and peripherals markets. STMicroelectronics N.V. was incorporated in 1987 and is headquartered in Geneva, Switzerland.