Contrasting SMC (OTCMKTS:SMCAY) and TD SYNNEX (NYSE:SNX)

TD SYNNEX (NYSE:SNX) and SMC (OTCMKTS:SMCAY) are both large-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for TD SYNNEX and SMC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TD SYNNEX	0	1	7	1	3.00
SMC	0	2	1	0	2.33

TD SYNNEX presently has a consensus target price of $331.14, indicating a potential upside of 40.09%. Given TD SYNNEX’s stronger consensus rating and higher possible upside, analysts plainly believe TD SYNNEX is more favorable than SMC.

Institutional & Insider Ownership

84.0% of TD SYNNEX shares are held by institutional investors. Comparatively, 1.0% of SMC shares are held by institutional investors. 0.7% of TD SYNNEX shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

TD SYNNEX has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500. Comparatively, SMC has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TD SYNNEX	$62.51 billion	0.30	$827.66 million	$16.41	14.40
SMC	$5.60 billion	4.38	$1.10 billion	$1.03	18.65

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TD SYNNEX	1.75%	16.78%	3.98%
SMC	21.94%	9.40%	8.53%

Dividends

TD SYNNEX pays an annual dividend of $1.92 per share and has a dividend yield of 0.8%. SMC pays an annual dividend of $0.18 per share and has a dividend yield of 0.9%. TD SYNNEX pays out 11.7% of its earnings in the form of a dividend. SMC pays out 17.5% 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. TD SYNNEX has increased its dividend for 5 consecutive years.

Summary

TD SYNNEX beats SMC on 12 of the 18 factors compared between the two stocks.

About TD SYNNEX

TD SYNNEX is a global distributor and solutions aggregator serving the information technology industry. The company connects technology vendors with channel partners, including resellers, systems integrators, managed service providers and retailers. Its offerings span hardware, software and services across areas such as cloud computing, cybersecurity, data center infrastructure, networking and end-user computing. TD SYNNEX also provides partners with services that can support technology deployment, integration and ongoing management.

About SMC

SMC Corporation is a Japan-based manufacturer of components and systems used in factory automation. Its products include pneumatic control equipment, valves, actuators, air-preparation units, vacuum equipment and temperature-control devices. The company’s products help control the movement of air, fluids and machinery in automated production processes. SMC serves manufacturers across a range of industries, including automotive, electronics and food processing. Founded in Japan in 1959, SMC has grown into an international supplier, serving customers through operations and sales networks in markets around the world.