GlobalFoundries (NASDAQ:GFS) vs. Fujifilm (OTCMKTS:FUJIY) Critical Review

Fujifilm (OTCMKTS:FUJIY) and GlobalFoundries (NASDAQ:GFS) are both large-cap technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Volatility & Risk

Fujifilm has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, GlobalFoundries has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500.

Dividends

Fujifilm pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. GlobalFoundries pays an annual dividend of $0.48 per share and has a dividend yield of 1.0%. Fujifilm pays out 9.4% of its earnings in the form of a dividend. GlobalFoundries pays out 37.5% 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. Fujifilm is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Fujifilm and GlobalFoundries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fujifilm	7.61%	6.91%	4.38%
GlobalFoundries	10.36%	6.69%	4.69%

Valuation and Earnings

This table compares Fujifilm and GlobalFoundries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fujifilm	$22.30 billion	1.19	$1.83 billion	$1.27	8.37
GlobalFoundries	$6.79 billion	3.80	$885.00 million	$1.28	36.73

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

Institutional and Insider Ownership

0.0% of Fujifilm shares are owned by institutional investors. 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.

Analyst Ratings

This is a breakdown of recent ratings for Fujifilm and GlobalFoundries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fujifilm	0	1	0	0	2.00
GlobalFoundries	2	10	8	0	2.30

GlobalFoundries has a consensus price target of $75.79, suggesting a potential upside of 61.22%. Given GlobalFoundries’ stronger consensus rating and higher possible upside, analysts clearly believe GlobalFoundries is more favorable than Fujifilm.

Summary

GlobalFoundries beats Fujifilm on 9 of the 15 factors compared between the two stocks.

About Fujifilm

FUJIFILM Holdings Corporation develops, manufactures, sells, and services imaging, healthcare, materials, and business innovation solutions worldwide. The company's Healthcare segment provides products and services, such as medical devices, biomedical contract development and manufacturing organization, pharmaceutical, regenerative medicine, and cosmetics and supplements in the areas of prevention, diagnosis, and treatment. Its Materials segment offers inkjet digital presses and printing plates for printing industries, as well as industrial inkjet-related products and inkjet heads; storage media and archiving services to save and manage digital data volumes; and materials for industrials, including display and touch panel, semiconductor and image sensor, and functional film materials. The company's Business Innovation segment provides devices and services used in offices, including multi-function devices and printers; and provides problem-solving document services tailored to diverse business formats and roles, including system integration, cloud service, business process outsourcing, and others. Its Imaging segment offers color films, instant cameras, developing and printing systems, color papers, photo printing services, and others; and TV and cinema lenses, surveillance cameras, industrial lenses for production line inspection, and projectors. The company was incorporated in 1934 and is headquartered in Tokyo, Japan.

About GlobalFoundries

GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.