IHI (IHICY) & ASML (ASML) Financial Analysis

IHI (OTCMKTS: IHICY) and ASML (NASDAQ:ASML) are both industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Institutional & Insider Ownership

16.9% of ASML shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

IHI pays an annual dividend of $0.08 per share and has a dividend yield of 1.0%. ASML pays an annual dividend of $1.11 per share and has a dividend yield of 0.6%. IHI pays out 57.1% of its earnings in the form of a dividend. ASML pays out 19.9% 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.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for IHI and ASML, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IHI 0 0 0 0 N/A
ASML 0 3 8 0 2.73

ASML has a consensus target price of $192.33, indicating a potential downside of 1.71%. Given ASML’s higher probable upside, analysts clearly believe ASML is more favorable than IHI.

Earnings & Valuation

This table compares IHI and ASML’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IHI $13.75 billion 0.37 $48.79 million $0.14 58.43
ASML $10.23 billion 8.18 $2.39 billion $5.57 35.13

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

Profitability

This table compares IHI and ASML’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IHI 1.60% 9.30% 1.87%
ASML 24.30% 21.49% 12.64%

Summary

ASML beats IHI on 11 of the 13 factors compared between the two stocks.

About IHI

IHI Corporation, together with its subsidiaries, manufactures and sells machinery and equipment in Japan, the Americas, Europe, the Asia Pacific, and internationally. It offers boilers, components for nuclear power plants, facilities for nuclear fuel cycle plants, gas turbine/diesel engines/gas engines, environment responsive systems, and lithium-ion batteries. The company also provides LNG receiving terminals and storage tanks; equipment for plants and reactors; and engineering, procurement, construction, and start-up services for process and pharmaceutical plants. In addition, it offers bridges, water gates, and steel structures; shield tunneling machines, concrete construction materials, automated people movers, light rail transit, and other products; and security and environmental monitoring systems, as well as constructs and refurbishes offshore units and marine structures. Further, the company provides air and process gas compressors, separators, dehydrators, filters, and cryogenic products; turbochargers for vehicles and ships; parking and logistics systems, materials handling equipment, and construction machinery; steelmaking equipment, such as industrial furnaces and stepping cylinders; thermal and surface treatment equipment, factory automation systems, slitters, rubber and film calender lines, pulp and paper machinery, lubricating systems, and grid scale energy storage systems; and agricultural machines, motors, and lawn mowers. Additionally, it offers aero engines and air traffic control systems; and rockets, rocket and satellite propulsion systems, systems for satellites, space station-related equipment, ground test facilities, sample containers, etc., as well as engage in real estate rental and sales business. The company was formerly known as Ishikawajima-Harima Heavy Industries Co., Ltd. and changed its name to IHI Corporation in 2007. IHI Corporation was founded in 1853 and is headquartered in Tokyo, Japan.

About ASML

ASML Holding N.V. develops, produces, markets, sells, and services advanced semiconductor equipment systems consisting of lithography related systems primarily in the Netherlands, the United States, and Asia. It sells three categories of products, including DUV lithography, EUV lithography, and Holistic lithography solutions. The company offers TWINSCAN N)XT (DUV) systems for imaging wafers, which consists of systems that operate at a specific wavelength of the light source, such as i-line, krypton fluoride, and argon fluoride. It also provides TWINSCAN NXE (EUV) lithography systems, which are equipped with new EUV light source technology and a new optical technology that uses reflective mirrors rather than the traditional lenses; and TWINSCAN XT, YieldStar, and PAS 5500. The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.

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