Comparing SMC (OTCMKTS:SMCAY) & AMETEK (NYSE:AME)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AMETEK	19.91%	17.12%	10.68%
SMC	21.94%	9.40%	8.53%

Volatility and Risk

AMETEK has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, SMC has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Earnings & Valuation

This table compares AMETEK and SMC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AMETEK	$7.40 billion	7.08	$1.48 billion	$7.09	32.21
SMC	$5.60 billion	4.05	$1.10 billion	$1.03	17.22

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

Dividends

AMETEK pays an annual dividend of $1.36 per share and has a dividend yield of 0.6%. SMC pays an annual dividend of $0.18 per share and has a dividend yield of 1.0%. AMETEK pays out 19.2% of its earnings in the form of a dividend. SMC pays out 17.5% 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. AMETEK has increased its dividend for 6 consecutive years. SMC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and target prices for AMETEK and SMC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AMETEK	0	5	13	1	2.79
SMC	0	2	1	0	2.33

AMETEK currently has a consensus price target of $278.06, indicating a potential upside of 21.74%. Given AMETEK’s stronger consensus rating and higher probable upside, research analysts plainly believe AMETEK is more favorable than SMC.

Insider and Institutional Ownership

87.4% of AMETEK shares are held by institutional investors. Comparatively, 1.0% of SMC shares are held by institutional investors. 0.5% of AMETEK shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

AMETEK beats SMC on 14 of the 18 factors compared between the two stocks.

About AMETEK

AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices in the North America, Europe, Asia, and South America, and internationally. The company's EIG segment offers advanced instruments for the process, aerospace, power, and industrial markets; process and analytical instruments for the oil and gas, petrochemical, pharmaceutical, semiconductor, automation, and food and beverage industries; instruments to the laboratory equipment, ultra-precision manufacturing, medical, and test and measurement markets; power quality monitoring and c devices, uninterruptible power supplies, programmable power and electromagnetic compatibility test equipment, and sensors for gas turbines and dashboard instruments; heavy trucks, instrumentation, and controls for the food and beverage industries; and aircraft and engine sensors, power supplies, embedded computing, monitoring, fuel and fluid measurement, and data acquisition systems for aerospace and defense industry. Its EMG segment offers engineered medical components and devices, automation solutions, thermal management systems, specialty metals, and electrical interconnects; single-use and consumable surgical instruments, implantable components, and drug delivery systems; engineered electrical connectors and electronics packaging to protect sensitive devices and mission-critical electronics; precision motion control products for data storage, medical devices, business equipment, and automation; high-purity powdered metals, strips and foils, specialty clad metals, and metal matrix composites; motor-blower systems and heat exchangers for thermal management, military and commercial aircraft, and military ground vehicles; motors for commercial appliances, food and beverage machines, hydraulic pumps, and industrial blowers; and operates a network of aviation maintenance, repair, and overhaul facilities. AMETEK, Inc. was incorporated in 1930 and is headquartered in Berwyn, Pennsylvania.

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.