Contrasting TDK (OTCMKTS:TTDKY) & Seagate Technology (NASDAQ:STX)

Seagate Technology (NASDAQ:STX) and TDK (OTCMKTS:TTDKY) are both large-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for Seagate Technology and TDK, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seagate Technology	0	5	22	0	2.81
TDK	0	1	0	1	3.00

Seagate Technology presently has a consensus price target of $986.00, suggesting a potential upside of 4.28%. Given Seagate Technology’s higher probable upside, equities analysts plainly believe Seagate Technology is more favorable than TDK.

Profitability

This table compares Seagate Technology and TDK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seagate Technology	26.11%	369.98%	37.58%
TDK	7.87%	9.15%	4.48%

Risk and Volatility

Seagate Technology has a beta of 2.06, suggesting that its share price is 106% more volatile than the S&P 500. Comparatively, TDK has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Institutional and Insider Ownership

92.9% of Seagate Technology shares are owned by institutional investors. 0.5% of Seagate Technology shares are owned by company insiders. Comparatively, 0.0% of TDK shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Seagate Technology and TDK”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seagate Technology	$12.20 billion	17.63	$3.18 billion	$13.88	68.12
TDK	$16.64 billion	2.34	$1.29 billion	$0.68	29.41

Seagate Technology has higher earnings, but lower revenue than TDK. TDK is trading at a lower price-to-earnings ratio than Seagate Technology, indicating that it is currently the more affordable of the two stocks.

Dividends

Seagate Technology pays an annual dividend of $2.96 per share and has a dividend yield of 0.3%. TDK pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. Seagate Technology pays out 21.3% of its earnings in the form of a dividend. TDK pays out 23.5% 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. Seagate Technology has raised its dividend for 1 consecutive years.

Summary

Seagate Technology beats TDK on 14 of the 18 factors compared between the two stocks.

About Seagate Technology

Seagate Technology Holdings plc provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally. It provides mass capacity storage products, including enterprise nearline hard disk drives (HDDs), enterprise nearline solid state drives (SSDs), enterprise nearline systems, video and image HDDs, and network-attached storage drives. The company also offers legacy applications comprising Mission Critical HDDs and SSDs; external storage solutions under the Seagate Ultra Touch, One Touch, and Expansion product lines, as well as under the LaCie brand name; desktop drives; notebook drives, DVR HDDs, and gaming SSDs. In addition, it provides Lyve edge-to-cloud mass capacity platform. The company sells its products primarily to OEMs, distributors, and retailers. Seagate Technology Holdings plc was founded in 1978 and is based in Dublin, Ireland.

About TDK

TDK Corporation, together with its subsidiaries, engages in manufacture and sale of electronic components in Japan, Europe, China, Asia, the Americas, and internationally. The company operates through Passive Components, Sensor Application Products, Magnetic Application Products, Energy Application Products, and Other segments. The Passive Components segment offers ceramic capacitors, aluminum electrolytic capacitors, film capacitors, high-frequency components, piezoelectric materials, and circuit protection components, as well as inductive devices, including ferrite cores, coils, and transformers. The Sensor Application Products segment provides temperature and pressure, magnetic, and MEMS sensors. The Magnetic Application Products segment offers hard disk drives (HDD) heads, HDD suspension assemblies, and magnets. The Energy Application Products segment provides energy devices comprising rechargeable batteries, and power supplies. The Other segment provides mechatronics production equipment and camera module micro actuators for smartphones and other products. The company also engages in engages in insurance and real estate agency businesses. The company was formerly known as Tokyo Denki Kagaku Kogyo K.K. and changed its name to TDK Corporation in 1983. TDK Corporation was founded in 1935 and is headquartered in Tokyo, Japan.