PC Connection (NASDAQ:CNXN – Get Free Report) and Tokyo Electron (OTCMKTS:TOELY – Get Free Report) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.
Profitability
This table compares PC Connection and Tokyo Electron’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PC Connection | 3.25% | 11.38% | 7.49% |
| Tokyo Electron | 23.58% | 24.38% | 18.03% |
Institutional & Insider Ownership
42.8% of PC Connection shares are held by institutional investors. Comparatively, 1.3% of Tokyo Electron shares are held by institutional investors. 56.6% of PC Connection shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility and Risk
PC Connection has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Tokyo Electron has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for PC Connection and Tokyo Electron, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PC Connection | 0 | 0 | 1 | 1 | 3.50 |
| Tokyo Electron | 0 | 1 | 0 | 0 | 2.00 |
Dividends
PC Connection pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. Tokyo Electron pays an annual dividend of $1.67 per share and has a dividend yield of 1.0%. PC Connection pays out 19.8% of its earnings in the form of a dividend. Tokyo Electron pays out 38.2% 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. PC Connection has increased its dividend for 2 consecutive years.
Earnings and Valuation
This table compares PC Connection and Tokyo Electron”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PC Connection | $3.15 billion | 0.69 | $83.72 million | $4.05 | 21.41 |
| Tokyo Electron | $16.23 billion | 9.49 | $3.79 billion | $4.37 | 37.65 |
Tokyo Electron has higher revenue and earnings than PC Connection. PC Connection is trading at a lower price-to-earnings ratio than Tokyo Electron, indicating that it is currently the more affordable of the two stocks.
Summary
Tokyo Electron beats PC Connection on 10 of the 17 factors compared between the two stocks.
About PC Connection
PC Connection, Inc., together with its subsidiaries, provides a range of information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions. It offers IT products, such as computer systems, software and peripheral equipment, networking communications, and other products and accessories. The company also provides services comprising design, configuration, and implementation of IT solutions. In addition, publishes Connected, a quarterly publication that provides informative articles on the latest technologies and industry trends; distributes specialty catalogs to education, healthcare, and government customers; and MacConnection that publishes a catalog for the Apple market. The company markets its products and services through its Websites, such as connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses (SMBs) comprising small office/home offices customers; government and educational institutions; and medium-to-large corporate accounts through outbound telemarketing and field sales and marketing programs targeted to specific customer populations, as well as through digital, Web, and print media advertising. PC Connection, Inc. was founded in 1982 and is headquartered in Merrimack, New Hampshire.
About Tokyo Electron
Tokyo Electron Limited, together with its subsidiaries, develops, manufactures, and sells semiconductor and flat panel display (FPD) production equipment in Japan, Europe, North America, Taiwan, China, South Korea, Southeast Asia, and internationally. The company offers coaters/developers, etch systems, surface preparation systems, deposition systems, test systems, wafer bonders/debonders, wafer edge trimming, SiC epitaxial CVD systems, gas cluster ion beam system, and cleaning systems. It also provides plasma etch/ash systems for use in the manufacture of FPDs, as well as inkjet printing systems for manufacturing OLED displays. In addition, the company offers delivery, facility management, and non-life insurance services; sells semiconductor products, board computer products, software, and other electronic components; sells and supports network/storage/middleware related solutions; and develops, manufactures, and sells magnetic annealing systems. Tokyo Electron Limited was incorporated in 1951 and is headquartered in Tokyo, Japan.
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