Financial Review: Cognex (NASDAQ:CGNX) and Kyocera (OTCMKTS:KYOCY)

Cognex (NASDAQ:CGNX) and Kyocera (OTCMKTS:KYOCY) are both large-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.

Dividends

Cognex pays an annual dividend of $0.34 per share and has a dividend yield of 0.5%. Kyocera pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Cognex pays out 33.0% of its earnings in the form of a dividend. Kyocera pays out 17.9% 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. Cognex has raised its dividend for 10 consecutive years. Cognex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Cognex has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, Kyocera has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Institutional and Insider Ownership

88.1% of Cognex shares are held by institutional investors. Comparatively, 7.4% of Kyocera shares are held by institutional investors. 1.7% of Cognex shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cognex	16.05%	13.50%	10.02%
Kyocera	6.78%	4.17%	3.04%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognex	0	5	10	2	2.82
Kyocera	0	1	0	0	2.00

Cognex presently has a consensus target price of $75.64, indicating a potential upside of 21.51%. Given Cognex’s stronger consensus rating and higher possible upside, research analysts clearly believe Cognex is more favorable than Kyocera.

Earnings and Valuation

This table compares Cognex and Kyocera”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognex	$994.36 million	10.53	$114.44 million	$1.03	60.44
Kyocera	$13.75 billion	2.41	$936.46 million	$0.67	36.70

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

Summary

Cognex beats Kyocera on 15 of the 18 factors compared between the two stocks.

About Cognex

Cognex Corporation provides machine vision products that capture and analyze visual information to automate manufacturing and distribution tasks worldwide. Its machine vision products are used to automate the manufacturing and tracking of discrete items, including mobile phones, electric vehicle batteries, and e-commerce packages by locating, identifying, inspecting, and measuring them during the manufacturing or distribution process. The company offers VisionPro software, a suite of patented vision tools for advanced programming; QuickBuild that allows customers to build vision applications with a graphical, flowchart-based programming interface; and Cognex deep learning vision software. It also provides a range of inspection tasks, including part location, identification, measurement, assembly verification, and robotic guidance; vision sensors for vision applications, such as checking the presence and size of parts; and the In-Sight product line of vision systems and sensors. In addition, the company offers DataMan, an image-based barcode readers and barcode verifiers. It sells its products to automotive, logistics, consumer electronics, medical-related, semiconductor, consumer products, food and beverage, and others, as well as through a network of distributors and integrators. The company was incorporated in 1981 and is headquartered in Natick, Massachusetts.

About Kyocera

Kyocera Corporation develops, produces, and distributes products based on fine ceramic technologies in Japan, rest of Asia, Europe, the United States, and internationally. It operates through Core Components Business, Electronic Components Business, and Solutions Business segments. The Core Components Business segment offers components, such as fine ceramic components for semiconductor processing equipment, automotive camera modules, and ceramic packages, as well as organic packages and boards to protect electronic components and ICs to industrial machinery, automotive-related, and the information and communication-related markets; optical components, and jewelry and applied ceramic related products; and medical devices comprising prosthetic joints and dental implants. The Electronic Components Business segment provides various electronic components and devices, including capacitors, crystal devices, connectors, and power semiconductor devices for diverse fields comprising information and communications, industrial equipment, automotive-related, and consumer markets, as well as sensors and control components. The Solutions Business segment offers cutting tools, as well as pneumatic and power tools for automotive-related and general industrial, and construction markets; printers for offices; and communication terminals, such as mobile phones, as well as information systems and telecommunication services. This segment also provides MFPs, commercial inkjet printers, communication modules, displays, and printing devices, as well as information systems and telecommunication, smart energy-related products and services, and solution services, such as document management system. The company was formerly known as Kyoto Ceramic Kabushiki Kaisha and changed its name to Kyocera Corporation in 1982. Kyocera Corporation was incorporated in 1946 and is headquartered in Kyoto, Japan.