Key insights
- The article suggests Canon (CAJPY) is a worthwhile stock for value investors seeking stable dividends and potential growth in the medical equipment and semiconductor lithography sectors. While not a high-growth stock, its diverse product lineup and potential competition with ASML could lead to gradual appreciation. Limited US market influence.
Canon is a worthwhile stock for value investors who like a stable dividend. Currently pays over 4% with a payout ratio of under 50%.
Many see CAJPY as a value trap, since share price has really gone nowhere in decades. However, it has a very solid and varied lineup of products, enabling the company to steadily increase semiannual dividends. I believe it will eventually move permanently higher.
While Canon is best known for cameras and printers, it is a major player in digital imaging, having bought Toshiba's medical division in 2016. It's MRI machines have a devoted following. With aging populations, medical equipment can propel a lot of the company's growth.
Also noteworthy, Canon is probably the closest thing ASML has to a competitor with its "nanoimprint lithography" system. OK, it's a very, very distant competitor to ASML's dominance, but even small market share could contribute to growth or buyout by another potential competitor.
In sum, I don't think CAJPY is a potential 10-bagger. However, for patient investors who value a steady dividend while waiting for growth, Canon is not an awful choice.