Contrasting TDK (OTCMKTS:TTDKY) and Universal Display (NASDAQ:OLED)

TDK (OTCMKTS:TTDKY) and Universal Display (NASDAQ:OLED) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.

Insider and Institutional Ownership

78.2% of Universal Display shares are owned by institutional investors. 0.0% of TDK shares are owned by company insiders. Comparatively, 2.2% of Universal Display shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares TDK and Universal Display”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TDK	$16.64 billion	2.75	$1.30 billion	$0.69	34.12
Universal Display	$650.61 million	6.29	$242.07 million	$4.48	19.55

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

Profitability

This table compares TDK and Universal Display’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TDK	7.87%	10.01%	4.90%
Universal Display	34.08%	12.34%	11.04%

Volatility and Risk

TDK has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Universal Display has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for TDK and Universal Display, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TDK	0	1	0	1	3.00
Universal Display	1	2	3	0	2.33

Universal Display has a consensus target price of $130.60, indicating a potential upside of 49.12%. Given Universal Display’s higher probable upside, analysts plainly believe Universal Display is more favorable than TDK.

Dividends

TDK pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Universal Display pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. TDK pays out 8.7% of its earnings in the form of a dividend. Universal Display pays out 44.6% 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. Universal Display has raised its dividend for 8 consecutive years. Universal Display is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Universal Display beats TDK on 12 of the 18 factors compared between the two stocks.

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.

About Universal Display

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications in the United States and internationally. The company offers PHOLED technologies and materials for displays and lighting products under the UniversalPHOLED brand. It is also involved in the research, development, and commercialization of other OLED device and manufacturing technologies, including FOLED that are flexible OLEDs for the fabrication of OLEDs on flexible substrates; and OVJP, an organic vapor jet printing technology. In addition, the company provides technology development and support services, including third-party collaboration and support to third parties for the commercialization of their OLED products; and contract research services in the areas of chemical synthesis research, development, and commercialization for non-OLED applications, as well as engages in the intellectual property and technology licensing activities. Universal Display Corporation was founded in 1985 and is headquartered in Ewing, New Jersey.