Head-To-Head Comparison: Garmin (NYSE:GRMN) and SMC (OTCMKTS:SMCAY)

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

Dividends

SMC pays an annual dividend of $0.23 per share and has a dividend yield of 1.3%. Garmin pays an annual dividend of $3.60 per share and has a dividend yield of 1.7%. SMC pays out 28.8% of its earnings in the form of a dividend. Garmin pays out 47.4% 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. Garmin has increased its dividend for 8 consecutive years. Garmin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for SMC and Garmin, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SMC	0	0	0	0	0.00
Garmin	2	1	0	1	2.00

Garmin has a consensus price target of $206.00, suggesting a potential downside of 3.76%. Given Garmin’s stronger consensus rating and higher probable upside, analysts plainly believe Garmin is more favorable than SMC.

Profitability

This table compares SMC and Garmin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SMC	19.69%	8.01%	7.30%
Garmin	22.76%	19.21%	15.58%

Insider & Institutional Ownership

1.0% of SMC shares are held by institutional investors. Comparatively, 81.6% of Garmin shares are held by institutional investors. 15.4% of Garmin shares are held 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.

Valuation & Earnings

This table compares SMC and Garmin”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SMC	$5.20 billion	4.39	$1.03 billion	$0.80	22.36
Garmin	$6.45 billion	6.39	$1.41 billion	$7.60	28.16

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

Risk & Volatility

SMC has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Garmin has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Summary

Garmin beats SMC on 15 of the 17 factors compared between the two stocks.

About SMC

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers air management system, directional control valves, air cylinders, rotatory actuators/air grippers, electric actuators/cylinders, fitting and tubing, and modular F.R.L./pressure control equipment, as well as vacuum, air preparation, and lubrication equipment. It also provides flow control equipment, speed controllers, silencers/exhaust/blow guns/pressure gauges, switches/sensors/controllers, static neutralization equipment, and industrial device communication equipment/wireless system. In addition, the company offers process valves, chemical liquid valves/fittings and needle valves/tubing, process pumps, temperature control equipment, and process gas equipment, as well as high vacuum equipment, industrial filters/sintered metal elements, and pneumatic instrumentation and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.