Critical Analysis: Kyocera (KYO) & AZZ (AZZ)

Kyocera (NYSE: KYO) and AZZ (NYSE:AZZ) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kyocera $12.70 billion 1.94 $965.73 million $3.19 20.97
AZZ $858.93 million 1.56 $60.92 million $1.97 26.27

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

Profitability

This table compares Kyocera and AZZ’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kyocera 8.57% 5.24% 4.09%
AZZ 6.27% 9.65% 5.13%

Dividends

Kyocera pays an annual dividend of $0.95 per share and has a dividend yield of 1.4%. AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. Kyocera pays out 29.8% of its earnings in the form of a dividend. AZZ pays out 34.5% 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. Kyocera has increased its dividend for 3 consecutive years. Kyocera is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Kyocera and AZZ, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kyocera 0 0 1 0 3.00
AZZ 0 1 0 0 2.00

AZZ has a consensus price target of $52.00, suggesting a potential upside of 0.48%. Given AZZ’s higher possible upside, analysts clearly believe AZZ is more favorable than Kyocera.

Insider and Institutional Ownership

0.6% of Kyocera shares are owned by institutional investors. Comparatively, 88.0% of AZZ shares are owned by institutional investors. 0.0% of AZZ shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Kyocera has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, AZZ has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.

Summary

Kyocera beats AZZ on 10 of the 17 factors compared between the two stocks.

About Kyocera

Kyocera Corporation is engaged in various fields, from fine ceramic components to electronic devices, equipment, services and networks. The Company operates through seven segments: Fine Ceramic Parts Group, Semiconductor Parts Group, Applied Ceramic Products Group, Electronic Device Group, Telecommunications Equipment Group, Information Equipment Group and Others. The Company’s products include components for semiconductor processing equipment and flat panel display manufacturing equipment, information and telecommunication components, general industrial machinery components, sapphire substrates, automotive components, solar energy products, cutting tools, medical and dental implants, jewelry and applied ceramic related products, page printers and multifunctional products. It also offers information systems and telecommunication services, engineering business, management consulting business, materials for semiconductors, chemical materials and realty development business.

About AZZ

AZZ Inc. is a provider of galvanizing services, welding solutions, specialty electrical equipment and engineered services to the power generation, transmission, distribution, refining and industrial markets. The Company operates through two segments: Energy segment and Galvanizing segment. Its Energy segment provides products and services designed to support industrial, nuclear and electrical applications. Its product offerings include custom switchgear, electrical enclosures, medium and high voltage bus ducts, explosion proof and hazardous duty lighting, nuclear safety-related equipment and tubular products. Its Galvanizing segment provides hot dip galvanizing to the steel fabrication industry through facilities located throughout the United States and Canada. It serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical and general industrial markets and various original equipment manufacturers.

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