How Does Samsung Compare With Other Value Technology Stocks?

Samsung Electronics (OTC:SSNLF) has among the most attractive valuation multiples in the technology space, trading at a P/E of under 9x, which is well below most of its western peers. Below, we compare the firm’s key valuation metrics with other mature technology names such as Apple, Intel, Cisco and IBM.

• Samsung has the lowest P/E and P/CF multiples of the group. This is partly due to operational factors such as competitive pressures from Chinese smartphone manufacturers and  the firm’s lack of a true competitive advantage (such as software/ecosystem differentiation) in its core smartphone business. Separately, the company’s complex ownership structure and its absence in the U.S. stock markets could be weighing on its valuation. 

• Samsung is slated to post stronger EPS growth compared to most of the other companies in the above table, amid a stronger performance of its smartphone unit, which recently launched the well received Galaxy S7 series and also due to a relatively depressed earnings base for FY2015.

• Samsung’s dividend yield is the lowest of the group at just 1.6%. However, the number could improve going forward, as the company deploys a greater portion of its cash pile (roughly $60 billion as of Q1 2016) towards buybacks and its capital return program.

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