There Are Better Options Than Xerox Corporation (XRX): Hewlett-Packard Company (HPQ), Canon Inc. (ADR) (CAJ)

Alternatives

Hewlett-Packard Company (NYSE:HPQ) is one of the leading makers of printing and copying equipment, as well as a variety of computers and peripherals.  I wouldn’t consider Hewlett-Packard Company (NYSE:HPQ) for a long-term investment until its new turnaround starts to produce tangible results.  CEO Meg Whitman recently said that the company will experience earnings growth next year, a statement that helped fuel the stock’ srecent rally off its low of $11.35 just a few months ago.  If it were still in the low-to-mid teens, I would recommend taking a chance on Hewlett-Packard Company (NYSE:HPQ), but at the current levels, I don’t think the potential reward quite justifies the risk.

Canon Inc. (ADR) (NYSE:CAJ), which is based in Japan, has proven itself to be able to create shareholder value even in the face of changing industry conditions.  At first glance, Canon may appear expensive at over 16 times forward earnings.  However, of the major printing/copying equipment manufacturers, Canon Inc. (ADR) (NYSE:CAJ) is by far the most stable company, revenue and earnings-wise.  They also have over $8 billion in cash and virtually no long term debt, a huge positive for long-term investors.

Conclusion

As far as document equipment companies go, there are slim pickings as far as long-terminvestability goes.  However, if you insist on investing in this sector, a stable company with a diverse product line such as Canon Inc. (ADR) (NYSE:CAJ) seems to be the way to go.  Barring a pullback of 20% or so, Xerox is definitely a “stay away” as far as I’m concerned.

The article There Are Better Options Than This Document Equipment Manufacturer originally appeared on Fool.com and is written by  Matthew Frankel.

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