Contrasting Flex (NASDAQ:FLEX) and SMC (OTCMKTS:SMCAY)

SMC (OTCMKTS:SMCAY) and Flex (NASDAQ:FLEX) are both large-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Insider and Institutional Ownership

1.0% of SMC shares are owned by institutional investors. Comparatively, 94.3% of Flex shares are owned by institutional investors. 0.6% of Flex shares are owned 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.

Volatility and Risk

SMC has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Flex has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Valuation and Earnings

This table compares SMC and Flex”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SMC	$5.20 billion	5.17	$1.03 billion	$0.84	25.05
Flex	$25.81 billion	0.93	$838.00 million	$2.23	29.32

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

Analyst Ratings

This is a breakdown of recent ratings for SMC and Flex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SMC	0	0	0	1	4.00
Flex	0	3	9	0	2.75

Flex has a consensus price target of $67.10, suggesting a potential upside of 2.62%. Given Flex’s higher possible upside, analysts plainly believe Flex is more favorable than SMC.

Profitability

This table compares SMC and Flex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SMC	19.41%	7.80%	7.08%
Flex	3.17%	20.99%	5.46%

Summary

Flex beats SMC on 9 of the 15 factors compared between the two stocks.

About SMC

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers air management system, directional control valves, air cylinders, rotatory actuators/air grippers, electric actuators/cylinders, fitting and tubing, and modular F.R.L./pressure control equipment, as well as vacuum, air preparation, and lubrication equipment. It also provides flow control equipment, speed controllers, silencers/exhaust/blow guns/pressure gauges, switches/sensors/controllers, static neutralization equipment, and industrial device communication equipment/wireless system. In addition, the company offers process valves, chemical liquid valves/fittings and needle valves/tubing, process pumps, temperature control equipment, and process gas equipment, as well as high vacuum equipment, industrial filters/sintered metal elements, and pneumatic instrumentation and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.

About Flex

Flex Ltd. provides technology, supply chain, and manufacturing solutions in Asia, the Americas, and Europe. It operates through three segments: Flex Agility Solutions (FAS), Flex Reliability Solutions (FRS), and Nextracker. The FAS segment offers flexible supply and manufacturing system comprising communications, enterprise and cloud solution, which includes data, edge, and communications infrastructure; lifestyle solution including appliances, consumer packaging, floorcare, micro mobility, and audio; and consumer devices, such as mobile and high velocity consumer devices. Its FRS segment provides complex ramps with specialized production models and critical environments, which comprise automotive including next generation mobility, autonomous, connectivity, electrification, and smart technologies; health solutions, such as medical devices, medical equipment, and drug delivery; and industrial solutions including capital equipment, industrial devices, and renewables and grid edge. The Nextracker segment offers solar tracker and software solutions, which are used in utility-scale and ground-mounted distributed generation solar projects. In addition, it provides a broad array of services including design and engineering, component services, rapid prototyping, fulfillment, and circular economy solutions. The company was formerly known as Flextronics International Ltd. and changed its name to Flex Ltd. in September 2016. Flex Ltd. was founded in 1969 and is headquartered in Singapore.