Tokyo Electron vs ASML Which Should You Buy?

Tokyo Electron and ASML are two major players in the semiconductor industry, each specializing in different areas of chip manufacturing technology. Tokyo Electron focuses on semiconductor equipment and manufacturing processes, while ASML is known for their advanced lithography tools. Both companies have seen significant growth and success in recent years, but their stocks have performed differently. While ASML's stock has been on a steady incline, Tokyo Electron's stock has experienced more fluctuations. Investors looking to capitalize on the booming semiconductor market should carefully consider the strengths and weaknesses of both companies before making investment decisions.

Tokyo Electron or ASML?

When comparing Tokyo Electron 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 Tokyo Electron 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. Tokyo Electron has a dividend yield of -%, while ASML has a dividend yield of 0.89%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Tokyo Electron reports a 5-year dividend growth of 132.79% year and a payout ratio of 26.72%. 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 Tokyo Electron P/E ratio at 13.05 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. Tokyo Electron P/B ratio is 3.13 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, Tokyo Electron has seen a 5-year revenue growth of 1.06%, while ASML's is 1.71%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Tokyo Electron's ROE at 25.65% and ASML's ROE at 47.68%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $77.85 for Tokyo Electron and $716.22 for ASML. Over the past year, Tokyo Electron's prices ranged from $68.83 to $134.91, with a yearly change of 96.00%. 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.