Lexmark International (NYSE: LXK) and EMC (NYSE:EMC) are both technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitabiliy, dividends, earnings, analyst recommendations, valuation and risk.

Dividends

Lexmark International pays an annual dividend of $1.44 per share and has a dividend yield of 3.6%. EMC pays an annual dividend of $0.46 per share and has a dividend yield of 1.6%. Lexmark International pays out -133.3% of its earnings in the form of a dividend. EMC pays out 43.0% 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. Lexmark International has increased its dividend for 6 consecutive years and EMC has increased its dividend for 3 consecutive years. Lexmark International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations for Lexmark International and EMC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lexmark International 0 0 0 0 N/A
EMC 0 6 2 0 2.25

EMC has a consensus target price of $29.70, indicating a potential upside of 2.23%. Given EMC’s higher possible upside, analysts clearly believe EMC is more favorable than Lexmark International.

Risk & Volatility

Lexmark International has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, EMC has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

Insider & Institutional Ownership

81.8% of Lexmark International shares are held by institutional investors. Comparatively, 79.9% of EMC shares are held by institutional investors. 2.8% of Lexmark International shares are held by insiders. Comparatively, 0.4% of EMC shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Lexmark International and EMC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lexmark International 2.17% 7.30% 2.01%
EMC 10.47% 10.66% 5.47%

Valuation and Earnings

This table compares Lexmark International and EMC’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lexmark International N/A N/A N/A ($1.08) -37.49
EMC N/A N/A N/A $1.07 27.15

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.

Lexmark International Company Profile

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.

EMC Company Profile

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.

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