Analyzing Universal Display (OLED) & NeoPhotonics (NPTN)

Universal Display (NASDAQ: OLED) and NeoPhotonics (NYSE:NPTN) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Valuation & Earnings

This table compares Universal Display and NeoPhotonics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Universal Display $198.89 million 40.59 $48.07 million $2.09 82.11
NeoPhotonics $411.42 million 0.74 -$200,000.00 ($0.87) -8.00

Universal Display has higher earnings, but lower revenue than NeoPhotonics. NeoPhotonics is trading at a lower price-to-earnings ratio than Universal Display, indicating that it is currently the more affordable of the two stocks.

Dividends

Universal Display pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. NeoPhotonics does not pay a dividend. Universal Display pays out 5.7% of its earnings in the form of a dividend.

Profitability

This table compares Universal Display and NeoPhotonics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Display 32.92% 16.67% 14.26%
NeoPhotonics -11.37% -13.61% -7.46%

Risk and Volatility

Universal Display has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, NeoPhotonics has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Universal Display and NeoPhotonics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Display 0 7 5 0 2.42
NeoPhotonics 0 3 5 1 2.78

Universal Display presently has a consensus price target of $150.56, suggesting a potential downside of 12.26%. NeoPhotonics has a consensus price target of $8.67, suggesting a potential upside of 24.52%. Given NeoPhotonics’ stronger consensus rating and higher possible upside, analysts plainly believe NeoPhotonics is more favorable than Universal Display.

Institutional and Insider Ownership

65.0% of Universal Display shares are owned by institutional investors. Comparatively, 81.1% of NeoPhotonics shares are owned by institutional investors. 5.2% of Universal Display shares are owned by company insiders. Comparatively, 17.3% of NeoPhotonics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

NeoPhotonics beats Universal Display on 8 of the 15 factors compared between the two stocks.

Universal Display Company Profile

Universal Display Corporation is engaged in the research, development and commercialization of organic light emitting diode (OLED), technologies and materials for use in display and solid-state lighting applications. The Company also supplies its OLED materials to manufacturers of OLED displays and lighting products for evaluation and for use in product development and for pre-commercial activities, and it also provides technical assistance and support to these manufacturers. The Company has produced and sold phosphorescent emitter materials that produce red, yellow, green and light-blue light, which are combined in various ways for the display and lighting markets. It has also developed host materials for the emissive layer. The Company is a supplier of phosphorescent emitter materials to OLED product manufacturers. Phosphorescent OLEDs utilize specialized materials and device structures that allow OLEDs to emit light through a process known as phosphorescence.

NeoPhotonics Company Profile

NeoPhotonics Corporation develops, manufactures and markets optoelectronic products that transmit, receive and switch digital optical signals for communications networks. The Company develops and manufactures Transmitter Products, Receiver Products and Switch Products that are used in ultra-high speed digital optical communications, high speed switching and provisioning, and access connections for wireless and fiber-to-the-home communications networks. The Company’s products are categorized into groups, including High Speed Products and Network Products and Solutions. The High Speed Products includes products designed for 100G and beyond for telecommunication and datacenter or content provider networks and applications. Its Network Products and Solutions consist of various products designed for applications below 100G, and include 40G products. The Company combines its transmitter and receiver products into Transceiver modules.

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