Critical Contrast: Daktronics (NASDAQ:DAKT) versus Furukawa Electric (OTCMKTS:FUWAY)

Furukawa Electric (OTCMKTS:FUWAY) and Daktronics (NASDAQ:DAKT) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Furukawa Electric and Daktronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Furukawa Electric	N/A	N/A	N/A
Daktronics	0.96%	15.42%	8.15%

Valuation & Earnings

This table compares Furukawa Electric and Daktronics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Furukawa Electric	N/A	N/A	N/A	$62.81	0.76
Daktronics	$770.28 million	1.61	-$10.12 million	$0.13	195.46

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Furukawa Electric and Daktronics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Furukawa Electric	0	0	0	0	0.00
Daktronics	0	1	0	1	3.00

Institutional and Insider Ownership

61.7% of Daktronics shares are owned by institutional investors. 5.3% of Daktronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Furukawa Electric pays an annual dividend of $30.31 per share and has a dividend yield of 63.2%. Daktronics pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Furukawa Electric pays out 48.3% of its earnings in the form of a dividend. Daktronics pays out 153.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Furukawa Electric is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Daktronics beats Furukawa Electric on 9 of the 12 factors compared between the two stocks.

About Furukawa Electric

Furukawa Electric Co., Ltd. manufactures and sells telecommunications, energy, automobile, electronic, and construction products worldwide. It operates through Infrastructure, Electronics & Automotive Systems, Functional Products, and Service and Developments segments. The company offers telecommunications products, such as broadband systems, routers/network equipment, and wireless products; and optical fiber cables and identifiers, optical closures/termination boxes, optical connectors/cords, fusion splicers/optical connecting tools, optical fiber line monitoring/management systems, optical active component, and metal communication cables, as well as wiring materials. It also offers energy products, including power cables, cable-related equipment/connection and terminal products, industrial machine-related equipment, fire-prevention products, electrical conductors, power distribution products, and cable conduit materials; and automobile products comprising wire harnesses, connectors, functional products and materials, and interior finishing materials. In addition, the company provides electronics parts materials, fluorescent lamps, LED reflectors, and tapes, as well as healthcare products, such as shape memory/super-elastic alloys; construction products, including water distribution piping and fluid transport piping products, heat insulators, and cable-related equipment/connection and terminal products, as well as power distribution and fire-prevention products; superconducting cables, industrial lasers, flow cytometers, and fluorescent silica nanoparticles; and maintenance/inspection solutions. Furukawa Electric Co., Ltd. was founded in 1884 and is headquartered in Chiyoda, Japan.

About Daktronics

Daktronics, Inc. designs, manufactures, and sells electronic scoreboards, programmable display systems and large screen video displays for sporting, commercial, and transportation applications in the United States and internationally. It operates through Commercial, Live Events, High School Park and Recreation, Transportation, and International segments. The company also offers video display and walls; scoreboards and timing systems; LED message displays and sings; intelligent transportation systems dynamic message signs; mass transit display; sound systems; and digital billboards and street furniture, and digit and price displays. In addition, it provides indoor dynamic messaging systems and liquid crystal display signs; and software and controllers, which includes Venus, a control suite software to control the creation of messages and graphic sequences for uploading to displays. The company sells its products through direct sales and resellers. Daktronics, Inc. was founded in 1968 and is headquartered in Brookings, South Dakota.