Camtek (NASDAQ: CAMT) and PDF Solutions (NASDAQ:PDFS) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Insider and Institutional Ownership

18.2% of Camtek shares are owned by institutional investors. Comparatively, 82.5% of PDF Solutions shares are owned by institutional investors. 79.4% of Camtek shares are owned by insiders. Comparatively, 16.2% of PDF Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Camtek and PDF Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Camtek 2.56% 15.32% 10.10%
PDF Solutions 5.29% 2.78% 2.49%

Valuation & Earnings

This table compares Camtek and PDF Solutions’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Camtek $116.68 million 1.33 $13.85 million $0.08 54.63
PDF Solutions $104.27 million 4.56 $9.44 million $0.18 81.72

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Camtek and PDF Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Camtek 0 1 1 0 2.50
PDF Solutions 0 2 1 0 2.33

Camtek currently has a consensus target price of $7.00, suggesting a potential upside of 60.18%. PDF Solutions has a consensus target price of $23.33, suggesting a potential upside of 58.62%. Given Camtek’s stronger consensus rating and higher probable upside, analysts plainly believe Camtek is more favorable than PDF Solutions.

Volatility & Risk

Camtek has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, PDF Solutions has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Summary

Camtek beats PDF Solutions on 7 of the 13 factors compared between the two stocks.

Camtek Company Profile

Camtek Ltd. provides automated and technological solutions for production processes and products yield, enabling and supporting customers’ technologies in the semiconductor fabrication and printed circuit board (PCB) industries. The Company designs, develops, manufactures and markets products mainly based on two core technologies: automated optical inspection (AOI) and functional ink technology (FIT). The Company’s AOI systems are computerized systems that optically inspect various types of electronic product components for defects caused during the manufacturing process. Its AOI systems are used for both production processes and for manufacturers in the semiconductor fabrication industry, as well as the printed circuit board industry. The Company’s AOI products incorporate image processing software and algorithms, as well as electro-optics and precision mechanics. In addition, the Company’s AOI systems use technology to handle a range of inspection and verification needs.

PDF Solutions Company Profile

PDF Solutions, Inc. is a provider of infrastructure technologies and services for integrated circuits (IC). The Company’s technologies and services focus on the IC manufacturing process life cycle. It operates in the segment of licensing and implementation of yield improvement solutions for integrated circuit manufacturers. The Company’s solutions combine software, test chips, an electrical wafer test system, methodologies and professional services. The Company has developed solutions for yield simulation, analysis, loss detection, and improvement. Its characterization vehicle infrastructure (CVi) enables customers to electrically characterize the manufacturing process, and establish fail-rate information needed to calibrate manufacturing yield models and prioritize yield improvement activities. Its Exensio YieldAware solution combines software and services to enable customers to collect and combine product test data and equipment signals during production.

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