Analyzing Epson (SEKEY) and Fortinet (FTNT)

Epson (OTCMKTS: SEKEY) and Fortinet (NASDAQ:FTNT) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Profitability

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This table compares Epson and Fortinet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Epson 4.21% 8.78% 4.41%
Fortinet 2.10% 11.77% 4.20%

Institutional & Insider Ownership

0.1% of Epson shares are held by institutional investors. Comparatively, 68.7% of Fortinet shares are held by institutional investors. 17.0% of Fortinet shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Epson and Fortinet’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Epson $9.14 billion 0.79 $430.69 million $0.62 14.53
Fortinet $1.49 billion 6.16 $31.39 million $0.52 105.44

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

Risk & Volatility

Epson has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Fortinet has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Dividends

Epson pays an annual dividend of $0.09 per share and has a dividend yield of 1.0%. Fortinet does not pay a dividend. Epson pays out 14.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent recommendations for Epson and Fortinet, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Epson 0 0 0 0 N/A
Fortinet 1 12 10 0 2.39

Fortinet has a consensus target price of $49.14, indicating a potential downside of 10.37%. Given Fortinet’s higher possible upside, analysts plainly believe Fortinet is more favorable than Epson.

Summary

Fortinet beats Epson on 8 of the 15 factors compared between the two stocks.

About Epson

Seiko Epson Corporation, together with its subsidiaries, develops, manufactures, sells, and provides services for products in the printing solutions, visual communications, wearable and industrial products, and other businesses in Japan, the United States, China, and internationally. Its Printing Solutions segment provides inkjet printers, serial impact dot matrix printers, page printers, color image scanners, large-format inkjet printers, industrial inkjet printing systems, printers for use in POS systems, label printers and related consumables, office papermaking systems, personal computers, and others. The company's Visual Communications segment develops, manufactures, and sells 3LCD projectors for business, education, and the home markets; high-temperature polysilicon TFT LCD panels for 3LCD projectors; and smart eyewear. Its Wearable & Industrial Products segment offers watches and watch movements; sensing systems and equipment; built-in sensors used in the personal health and sports fields, etc.; industrial robots and other production systems; and electronic devices. This segment also designs, manufactures, and sells electronic devices, such as crystal units, crystal oscillators, and quartz sensors for consumer, automotive, and industrial equipment applications; and CMOS LSIs and other chips primarily for consumer electronics and automotive applications, as well as provides metal powders and surface finishing services. Seiko Epson Corporation was founded in 1942 and is headquartered in Suwa, Japan.

About Fortinet

Fortinet, Inc. is a network security company. The Company provides cyber security solutions to a range of enterprises, service providers and government organizations across the world. Its network security solution consists of FortiGate physical, virtual machine and cloud platforms, which provide integrated security and networking functions to protect data, applications and users from network-and content-level security threats. The Company’s product offerings consist of its FortiGate product family, along with its FortiManager central management and FortiAnalyzer central logging and reporting product families. Its cybersecurity platform includes a range of products, which include its FortiMail e-mail security, FortiSandbox advanced threat protection (ATP), FortiWeb Web application firewall, FortiDDos and FortiDB database security appliances, as well as its FortiClient endpoint security software, FortiAP secure wireless access points and FortiSwitch secure switch connectivity products.

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