Alpha and Omega Semiconductor (AOSL) and Universal Display (OLED) Financial Review

Alpha and Omega Semiconductor (NASDAQ: AOSL) and Universal Display (NASDAQ:OLED) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Volatility and Risk

Alpha and Omega Semiconductor has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500. Comparatively, Universal Display has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Institutional & Insider Ownership

70.5% of Alpha and Omega Semiconductor shares are owned by institutional investors. Comparatively, 65.0% of Universal Display shares are owned by institutional investors. 21.7% of Alpha and Omega Semiconductor shares are owned by company insiders. Comparatively, 5.2% of Universal Display shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Universal Display pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. Alpha and Omega Semiconductor does not pay a dividend. Universal Display pays out 5.9% of its earnings in the form of a dividend.

Profitability

This table compares Alpha and Omega Semiconductor and Universal Display’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alpha and Omega Semiconductor 3.92% 4.85% 3.78%
Universal Display 32.92% 16.67% 14.26%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Alpha and Omega Semiconductor and Universal Display, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alpha and Omega Semiconductor 0 1 3 0 2.75
Universal Display 0 7 5 0 2.42

Alpha and Omega Semiconductor currently has a consensus price target of $25.00, indicating a potential upside of 44.26%. Universal Display has a consensus price target of $146.11, indicating a potential downside of 11.98%. Given Alpha and Omega Semiconductor’s stronger consensus rating and higher probable upside, research analysts clearly believe Alpha and Omega Semiconductor is more favorable than Universal Display.

Valuation and Earnings

This table compares Alpha and Omega Semiconductor and Universal Display’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alpha and Omega Semiconductor $383.34 million 1.09 $13.82 million $0.61 28.41
Universal Display $198.89 million 39.26 $48.07 million $2.04 81.37

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

Summary

Universal Display beats Alpha and Omega Semiconductor on 10 of the 16 factors compared between the two stocks.

Alpha and Omega Semiconductor Company Profile

Alpha and Omega Semiconductor Limited is a designer, developer and global supplier of power semiconductors. The Company’s portfolio of power semiconductors includes approximately 1,600 products, as of June 30, 2016. The Company’s product portfolio consists of two categories: power discretes and power integrated circuits (ICs). The Company’s portfolio of products focuses high-volume applications, including personal computers, flat panel televisions, light-emitting diode (LED) lighting, smart phones, battery packs, consumer and industrial motor controls and power supplies for television, computers, servers and telecommunications equipment. The Company sells its products primarily to distributors in the Asia Pacific region, who in turn sell these products to end customers. The Company conducts its operations primarily in the United States, Hong Kong, China, Taiwan, Korea and Japan. Its products are applicable in desktop and tablet personal computers, flat panel displays and televisions.

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.

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