CANON INC. ADRs $30 - New York symbol CAJ

CANON INC. ADRs $30 (New York symbol CAJ; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.1 billion; Market cap: $33.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.canon.com) gets over half of its revenue by making office equipment, mainly printers and copiers. Other products include digital cameras and parts for TVs and medical gear.

Businesses continue to buy more of Canon’s copiers and laser printers, but consumers are taking more pictures with smartphones. That’s hurting the company’s camera sales.

In the three months ended June 30, 2015, Canon’s revenue fell 13.0%, to $8.0 billion from $9.2 billion a year earlier. Without the negative impact of the high U.S. dollar, sales in Japanese yen gained 5.1%. Overall earnings fell 30.2%, to $559.0 million from $800.5 million. Earnings per ADR dropped 29.2%, to $0.51 from $0.72, on fewer ADRs outstanding (each American depositary receipt represents one common share).

The company will likely earn $1.83 per ADR in 2015, down 3.2% from $1.89 in 2014. The stock trades at 16.4 times that figure. The $1.25 dividend yields 4.2%.

Canon is a hold.

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