Analyzing Leidos (NYSE:LDOS) and Fujitsu (OTCMKTS:FJTSY)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Leidos	8.43%	32.95%	11.60%
Fujitsu	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current recommendations for Leidos and Fujitsu, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leidos	0	4	9	0	2.69
Fujitsu	0	2	0	0	2.00

Leidos presently has a consensus price target of $214.18, suggesting a potential upside of 35.81%. Given Leidos’ stronger consensus rating and higher probable upside, analysts plainly believe Leidos is more favorable than Fujitsu.

Dividends

Leidos pays an annual dividend of $1.72 per share and has a dividend yield of 1.1%. Fujitsu pays an annual dividend of $0.11 per share and has a dividend yield of 0.5%. Leidos pays out 15.5% of its earnings in the form of a dividend. Fujitsu pays out 24.4% 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. Leidos has increased its dividend for 6 consecutive years. Leidos is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

76.1% of Leidos shares are held by institutional investors. Comparatively, 0.1% of Fujitsu shares are held by institutional investors. 0.7% of Leidos 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

Leidos has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Fujitsu has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leidos	$17.17 billion	1.16	$1.45 billion	$11.13	14.17
Fujitsu	$23.31 billion	1.56	$1.45 billion	$0.45	45.91

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

Summary

Leidos beats Fujitsu on 12 of the 17 factors compared between the two stocks.

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.

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.