Canon vs ASML Which Is a Smarter Choice?

Canon and ASML are two leading companies in the technology sector, specifically in the field of imaging and semiconductor manufacturing. Canon is known for its well-established brand in the camera and printer industry, while ASML specializes in producing cutting-edge lithography machines for semiconductor production. Investors often compare these two stocks as they both play crucial roles in the tech industry. Understanding the key differences and strengths of Canon and ASML stocks is essential for making informed investment decisions.

Canon or ASML?

When comparing Canon and ASML, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Canon and ASML.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Canon has a dividend yield of 2.72%, while ASML has a dividend yield of 0.89%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Canon reports a 5-year dividend growth of -9.21% year and a payout ratio of 47.55%. On the other hand, ASML reports a 5-year dividend growth of 29.40% year and a payout ratio of 35.02%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Canon P/E ratio at 16.83 and ASML's P/E ratio at 38.78. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Canon P/B ratio is 1.39 while ASML's P/B ratio is 16.63.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Canon has seen a 5-year revenue growth of 0.14%, while ASML's is 1.71%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Canon's ROE at 8.59% and ASML's ROE at 47.68%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $32.41 for Canon and $716.22 for ASML. Over the past year, Canon's prices ranged from $24.82 to $35.52, with a yearly change of 43.11%. ASML's prices fluctuated between $645.45 and $1110.09, with a yearly change of 71.99%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.