MKS Instruments (NASDAQ: MKSI) and EXFO (NASDAQ:EXFO) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.

Valuation and Earnings

This table compares MKS Instruments and EXFO’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MKS Instruments $1.30 billion 3.95 $104.80 million $5.58 16.88
EXFO $243.30 million 0.95 $850,000.00 $0.02 210.11

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

Profitability

This table compares MKS Instruments and EXFO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MKS Instruments 16.97% 21.21% 12.66%
EXFO 0.35% 5.26% 3.99%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for MKS Instruments and EXFO, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MKS Instruments 0 0 4 0 3.00
EXFO 0 4 1 0 2.20

MKS Instruments currently has a consensus price target of $109.75, suggesting a potential upside of 16.51%. EXFO has a consensus price target of $5.35, suggesting a potential upside of 27.38%. Given EXFO’s higher possible upside, analysts plainly believe EXFO is more favorable than MKS Instruments.

Insider and Institutional Ownership

95.5% of MKS Instruments shares are held by institutional investors. Comparatively, 16.2% of EXFO shares are held by institutional investors. 1.7% of MKS Instruments shares are held by company insiders. Comparatively, 20.0% of EXFO shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

MKS Instruments pays an annual dividend of $0.72 per share and has a dividend yield of 0.8%. EXFO does not pay a dividend. MKS Instruments pays out 12.9% of its earnings in the form of a dividend.

Risk & Volatility

MKS Instruments has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, EXFO has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.

Summary

MKS Instruments beats EXFO on 12 of the 16 factors compared between the two stocks.

MKS Instruments Company Profile

MKS Instruments, Inc. is a global provider of instruments, subsystems and process control solutions that measures, controls, powers, delivers, monitors and analyzes critical parameters of advanced manufacturing processes. The Company operates through two segments, including the Vacuum & Analysis segment and the Light & Motion segment. The Vacuum & Analysis segment provides a range of instruments, components, subsystems and software, which are derived from its core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control and information technology, ozone generation and delivery, radio frequency (RF) and direct current (DC) power, reactive gas generation and vacuum technology. The Light & Motion segment provides a range of instruments, components and subsystems, which are derived from its core competencies in lasers, photonics and optics.

EXFO Company Profile

EXFO Inc is a Canada-based company, which provides communications service providers (CSPs) and data center, cloud and Web-scale operators with field test, service assurance and analytics solutions to ensure the deployment, maintenance and management of physical, virtual, fixed and mobile networks. It focuses on network infrastructures: fourth generation (4G)/long-term evolution (LTE), wireless backhaul, small cells and distributed antenna systems (DAS), 100G network upgrades and fiber-to-the-home (FTTH)/fiber-to-the-curb (FTTC)/fiber-to-the-node (FTTN) deployments. It offers a range of wire line and wireless tests, service assurance and analytics solutions to the global telecommunications industry. Its products include TestFlow; LTB-8 platform; a family of optical time domain reflect meters (OTDRs); iSAM; MaxTester-940 Fiber Certifier optical loss test set (OLTS) for data center and enterprise markets, and the G.fast handheld test set.

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