Nanometrics (NASDAQ: NANO) and Ultratech (NASDAQ:UTEK) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Profitability

This table compares Nanometrics and Ultratech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nanometrics 19.94% 11.95% 10.01%
Ultratech 5.17% 3.22% 2.83%

Valuation and Earnings

This table compares Nanometrics and Ultratech’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nanometrics $241.61 million 2.68 $41.73 million $1.88 13.53
Ultratech N/A N/A N/A $0.42 71.98

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

Institutional & Insider Ownership

81.3% of Nanometrics shares are owned by institutional investors. Comparatively, 92.7% of Ultratech shares are owned by institutional investors. 6.7% of Nanometrics shares are owned by company insiders. Comparatively, 5.9% of Ultratech shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Nanometrics has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500. Comparatively, Ultratech has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Nanometrics and Ultratech, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nanometrics 0 0 3 0 3.00
Ultratech 0 3 0 0 2.00

Nanometrics presently has a consensus price target of $31.67, indicating a potential upside of 24.48%. Ultratech has a consensus price target of $28.88, indicating a potential downside of 4.47%. Given Nanometrics’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Nanometrics is more favorable than Ultratech.

Summary

Nanometrics beats Ultratech on 10 of the 11 factors compared between the two stocks.

Nanometrics Company Profile

Nanometrics Incorporated is a provider of process control metrology and inspection systems used primarily in the fabrication of semiconductors and other solid-state devices, including sensors, optoelectronic devices, high-brightness (HB) light emitting diodes (LEDs), discretes and data storages components. The Company’s automated and integrated metrology systems measure critical dimensions, device structures, topography and various thin film properties, including three-dimensional features and film thickness, as well as optical, electrical and material properties. The Company’s process control solutions are deployed throughout the fabrication process, from front-end-of-line substrate manufacturing, to production of semiconductors and other devices, to three-dimensional wafer-level packaging applications. The Company’s automated systems primarily consist of automated metrology systems that are employed in semiconductor production environments.

Ultratech Company Profile

Ultratech, Inc. (Ultratech) develops, manufactures and markets photolithography, laser thermal processing and inspection equipment. The Company operates through the manufacture and distribution of capital equipment to manufacturers of integrated circuits and nanotechnology components segment. The Company serves manufacturers of semiconductor devices, including packaging processes and various nanotechnology components such as laser diodes, high-brightness light emitting diodes (HBLEDs) and micro-electro-mechanical systems (MEMS), as well as atomic layer deposition systems (ALD) for customers located throughout the world. It has operations in North America, Europe, Singapore, Japan, Taiwan, Korea and the rest of Asia. The Company supplies step-and-repeat photolithography systems based on one-to-one (1X) imaging technology to customers located throughout North America, Europe and Asia.

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