Contrasting Ultra Clean (NASDAQ:UCTT) & onsemi (NASDAQ:ON)

Ultra Clean (NASDAQ:UCTT) and onsemi (NASDAQ:ON) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Valuation and Earnings

This table compares Ultra Clean and onsemi”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ultra Clean	$2.05 billion	1.84	-$181.20 million	($0.52)	-161.80
onsemi	$6.00 billion	5.25	$121.00 million	$1.56	51.85

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

Profitability

This table compares Ultra Clean and onsemi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ultra Clean	-1.07%	6.99%	2.89%
onsemi	10.17%	14.06%	8.31%

Risk and Volatility

Ultra Clean has a beta of 1.88, suggesting that its share price is 88% more volatile than the S&P 500. Comparatively, onsemi has a beta of 2.03, suggesting that its share price is 103% more volatile than the S&P 500.

Institutional & Insider Ownership

96.1% of Ultra Clean shares are owned by institutional investors. Comparatively, 97.7% of onsemi shares are owned by institutional investors. 1.8% of Ultra Clean shares are owned by company insiders. Comparatively, 0.3% of onsemi shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Ultra Clean and onsemi, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ultra Clean	1	0	5	1	2.86
onsemi	0	15	14	0	2.48

Ultra Clean currently has a consensus target price of $129.00, indicating a potential upside of 53.33%. onsemi has a consensus target price of $100.62, indicating a potential upside of 24.41%. Given Ultra Clean’s stronger consensus rating and higher possible upside, analysts plainly believe Ultra Clean is more favorable than onsemi.

Summary

onsemi beats Ultra Clean on 11 of the 15 factors compared between the two stocks.

About Ultra Clean

Ultra Clean Holdings, Inc. develops and supplies critical subsystems, components and parts, and ultra-high purity cleaning and analytical services for the semiconductor industry in the United States and internationally. The company provides ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, and gas line and component heaters; chemical delivery modules that deliver gases and reactive chemicals in a liquid or gaseous form from a centralized subsystem to the reaction chamber; and gas delivery systems, such as weldments, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system. It also offers various industrial and automation production equipment; fluid delivery systems consist of one or more chemical delivery units, including PFA tubing, filters, flow controllers, regulators, component heaters, and an integrated electronic and/or pneumatic control system; precision robotic systems; top-plate assemblies; frame assemblies; process modules, a subsystem of semiconductor manufacturing tools that process integrated circuits onto wafers; and other high-level assemblies. In addition, the company provides tool chamber parts cleaning and coating services; micro-contamination analysis services for tool parts, wafers and depositions, chemicals, cleanroom materials, deionized water, and airborne molecular contamination; and analytical verification services for process tool chamber part cleaning. It primarily serves original equipment manufacturing customers in the semiconductor capital equipment and semiconductor integrated device manufacturing industries, as well as display, consumer, medical, energy, industrial, and research equipment industries. The company was founded in 1991 and is headquartered in Hayward, California.

About onsemi

onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions. The Advanced Solutions Group segment is involved in the designing and developing of analog, mixed-signal, advanced logic, ASSPs and ASICs, Wi-Fi and power solutions for a broad base of end-users in the automotive, consumer, computing, industrial, communications, medical and aerospace/defense markets. The Intelligent Sensing Group segment is focused on the designing and developing of CMOS and CCD image sensors, as well as proximity sensors, image signal processors, single photon detectors, inclu