Veeco Instruments (NASDAQ: VECO) and Freescale Semiconductor (NYSE:FSL) 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, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Institutional & Insider Ownership

97.2% of Veeco Instruments shares are owned by institutional investors. 2.9% of Veeco Instruments shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Veeco Instruments and Freescale Semiconductor, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veeco Instruments 0 3 6 0 2.67
Freescale Semiconductor 0 0 0 0 N/A

Veeco Instruments presently has a consensus target price of $28.50, indicating a potential upside of 83.28%. Given Veeco Instruments’ higher probable upside, equities research analysts plainly believe Veeco Instruments is more favorable than Freescale Semiconductor.

Valuation and Earnings

This table compares Veeco Instruments and Freescale Semiconductor’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Veeco Instruments $332.45 million 2.26 -$122.21 million ($1.00) -15.55
Freescale Semiconductor N/A N/A N/A $1.06 34.50

Freescale Semiconductor has higher revenue, but lower earnings than Veeco Instruments. Veeco Instruments is trading at a lower price-to-earnings ratio than Freescale Semiconductor, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Veeco Instruments and Freescale Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veeco Instruments -10.16% -0.73% -0.47%
Freescale Semiconductor 7.14% N/A 10.15%

Summary

Veeco Instruments beats Freescale Semiconductor on 5 of the 9 factors compared between the two stocks.

Veeco Instruments Company Profile

Veeco Instruments Inc. is engaged in the design, development, manufacture and support of thin film process equipment, primarily sold to make electronic devices. The Company’s geographical segments include the United States; China; Europe, Middle East and Africa (EMEA), and Rest of World (ROW). The Company’s portfolio of technology solutions focus on market areas, including Lighting, Display & Power Electronics; Advanced Packaging, micro-electromechanical systems (MEMS) & radio frequency (RF); Scientific & Industrial, and Data Storage. The Company’s equipment is used to make electronic devices, including light emitting diodes (LEDs), MEMS, wireless devices, power electronics, hard disk drives (HDDs) and semiconductor devices. The Company’s System products include Metal Organic Chemical Vapor Deposition Systems, Precision Surface Processing Systems, Ion Beam Etch and Deposition Systems, Molecular Beam Epitaxy Systems, and Other Deposition and Industrial Products.

Freescale Semiconductor Company Profile

Freescale Semiconductor, Ltd. is a United States-based company, which provides microcontrollers and digital networking processors. The Company offers its product under various categories, including advanced reduced instruction set computer (RISC) machines (ARM) processors, such as QorIQ multicore processors; Power Architecture processors, such as integrated host processors; more processors, such as crypto coprocessors; analog and power management, such as drivers and switches; radio frequency (RF), such as digital front end processors; sensors, such as intelligent sensors and sensor hubs; wireless connectivity, and programs and technologies. The Company offers various applications, including basic rear view camera, EtherCAT, portable navigation devices, access and remote control, human machine interface (HMI), blood glucose monitors, and gas and water meter. Its software’s and tools include run-time software, software development tools and hardware development tools, among others.

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