Analyzing EMC (EMC) and Lexmark International (LXK)
EMC (NYSE: EMC) and Lexmark International (NYSE:LXK) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitabiliy.
Earnings and Valuation
This table compares EMC and Lexmark International’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
Lexmark International is trading at a lower price-to-earnings ratio than EMC, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
EMC has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Lexmark International has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500.
This is a summary of recent ratings for EMC and Lexmark International, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
EMC presently has a consensus price target of $29.70, suggesting a potential upside of 2.23%. Given EMC’s higher probable upside, analysts plainly believe EMC is more favorable than Lexmark International.
This table compares EMC and Lexmark International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
79.9% of EMC shares are owned by institutional investors. Comparatively, 81.8% of Lexmark International shares are owned by institutional investors. 0.4% of EMC shares are owned by insiders. Comparatively, 2.8% of Lexmark International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
EMC pays an annual dividend of $0.46 per share and has a dividend yield of 1.6%. Lexmark International pays an annual dividend of $1.44 per share and has a dividend yield of 3.6%. EMC pays out 43.0% of its earnings in the form of a dividend. Lexmark International pays out -133.3% 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. EMC has raised its dividend for 6 consecutive years and Lexmark International has raised its dividend for 3 consecutive years. Lexmark International is clearly the better dividend stock, given its higher yield and lower payout ratio.
EMC beats Lexmark International on 7 of the 12 factors compared between the two stocks.
EMC Corporation (EMC) develops, delivers and supports the information technology (IT) industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. EMC manages the Company as part of a federation of businesses: EMC Information Infrastructure, VMware Virtual Infrastructure, Pivotal and Virtustream. EMC’s Information Infrastructure business provides a foundation for organizations to store, manage, protect, analyze and secure information. EMC’s VMware Virtual Infrastructure business is engaged in virtualization and cloud infrastructure solutions that enable businesses to help transform the way they build, deliver and consume IT resources in a manner that is based on their specific needs. EMC’s Pivotal business unites strategic technology, people and programs from EMC and VMware and has a platform that consists of data, agile development practices and a cloud independent platform-as-a-service.
About Lexmark International
Lexmark International, Inc. is a United States-based company, which is a provider of printing and imaging products, software, solutions and services. The Company’s software scans everything from spreadsheets to medical images, and provides services to banking, healthcare, insurance and retail companies. It creates enterprise software, hardware and services that remove inefficiencies of information silos and disconnected processes. It offers various services, such as managed print services, hardware warranty and repair service, professional services and enterprise software services. It offers solutions, such as financial process automation, business process management, Web information integration and consumer loan origination. Its hardware category includes equipment collection program, and Smart multifunction product (MFP) includes device management and mobile print solutions. It produces and distributes millions of supplies each year, including ink, toner and paper.
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