Ultra Clean Holdings (NASDAQ: UCTT) and ASML Holding N.V. (NASDAQ:ASML) are both semiconductor equipment & testing – nec companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, analyst recommendations, valuation, profitability, risk and institutional ownership.

Valuation and Earnings

This table compares Ultra Clean Holdings and ASML Holding N.V.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Ultra Clean Holdings $562.76 million 1.43 $10.05 million $1.88 12.77
ASML Holding N.V. $7.52 billion 10.49 $1.63 billion $5.05 36.34

ASML Holding N.V. has higher revenue and earnings than Ultra Clean Holdings. Ultra Clean Holdings is trading at a lower price-to-earnings ratio than ASML Holding N.V., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ultra Clean Holdings and ASML Holding N.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ultra Clean Holdings 7.55% 30.08% 16.80%
ASML Holding N.V. 23.81% 19.82% 11.51%

Dividends

ASML Holding N.V. pays an annual dividend of $1.11 per share and has a dividend yield of 0.6%. Ultra Clean Holdings does not pay a dividend. ASML Holding N.V. pays out 22.0% of its earnings in the form of a dividend.

Insider & Institutional Ownership

76.3% of Ultra Clean Holdings shares are owned by institutional investors. Comparatively, 16.1% of ASML Holding N.V. shares are owned by institutional investors. 2.6% of Ultra Clean Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Ultra Clean Holdings has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, ASML Holding N.V. has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ultra Clean Holdings and ASML Holding N.V., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ultra Clean Holdings 0 2 4 0 2.67
ASML Holding N.V. 0 5 11 0 2.69

Ultra Clean Holdings presently has a consensus target price of $31.00, suggesting a potential upside of 29.17%. ASML Holding N.V. has a consensus target price of $176.17, suggesting a potential downside of 4.01%. Given Ultra Clean Holdings’ higher probable upside, analysts plainly believe Ultra Clean Holdings is more favorable than ASML Holding N.V..

Summary

ASML Holding N.V. beats Ultra Clean Holdings on 10 of the 16 factors compared between the two stocks.

Ultra Clean Holdings Company Profile

Ultra Clean Holdings, Inc. is engaged in the design, engineering and manufacture of production tools, modules and subsystems the semiconductor capital equipment industry. The Company’s products include precision robotic solutions; gas delivery systems; a range of industrial and automation production equipment products; subsystems that includes wafer cleaning sub-systems, chemical delivery modules, top-plate assemblies, frame assemblies, and process modules. The Company offers its products for the semiconductor capital equipment and equipment industry segments. It also sells to the consumer, medical, energy, industrial, flat panel and research equipment industries. The Company is focused on providing specialized engineering and manufacturing solutions for these applications. It provides its original equipment manufacturing (OEM) customers an outsourced solution for the development, design, component sourcing, prototyping, engineering, manufacturing and testing of various systems.

ASML Holding N.V. Company Profile

ASML Holding N.V. is a holding company. The Company is a manufacturer of chip-making equipment. The Company is engaged in the development, production, marketing, selling and servicing of semiconductor equipment systems, consisting of lithography systems. The Company’s products include systems, and installed base products and services. The Company’s principal operations are in the Netherlands, the United States and Asia. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for 300 millimeter processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems). The Company also offers NXE systems, which are equipped with extreme ultraviolet (EUV) light source technology. The Company offers YieldStar, a wafer metrology system.

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