MACOM Technology Solutions Holdings (NASDAQ: MTSI) and Nanometrics (NASDAQ:NANO) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Volatility and Risk

MACOM Technology Solutions Holdings has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Nanometrics has a beta of 1.81, meaning that its stock price is 81% more volatile than the S&P 500.

Profitability

This table compares MACOM Technology Solutions Holdings and Nanometrics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MACOM Technology Solutions Holdings -22.43% 17.21% 7.73%
Nanometrics 19.23% 10.26% 8.68%

Earnings and Valuation

This table compares MACOM Technology Solutions Holdings and Nanometrics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
MACOM Technology Solutions Holdings $544.34 million 4.32 $1.43 million ($2.50) -14.65
Nanometrics $221.13 million 3.07 $44.03 million $1.79 14.80

Nanometrics has higher revenue, but lower earnings than MACOM Technology Solutions Holdings. MACOM Technology Solutions Holdings is trading at a lower price-to-earnings ratio than Nanometrics, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

82.4% of MACOM Technology Solutions Holdings shares are held by institutional investors. Comparatively, 81.5% of Nanometrics shares are held by institutional investors. 42.3% of MACOM Technology Solutions Holdings shares are held by insiders. Comparatively, 6.7% of Nanometrics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for MACOM Technology Solutions Holdings and Nanometrics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MACOM Technology Solutions Holdings 0 3 4 0 2.57
Nanometrics 0 0 3 0 3.00

MACOM Technology Solutions Holdings currently has a consensus target price of $49.67, suggesting a potential upside of 35.59%. Nanometrics has a consensus target price of $31.67, suggesting a potential upside of 19.54%. Given MACOM Technology Solutions Holdings’ higher probable upside, equities analysts plainly believe MACOM Technology Solutions Holdings is more favorable than Nanometrics.

About MACOM Technology Solutions Holdings

MACOM Technology Solutions Holdings, Inc. is a provider of high-performance analog semiconductor solutions that enable Internet applications, the cloud-connected applications economy, and the networked battlefield across the radio frequency (RF), microwave, millimeterwave and photonic spectrum. It has multiple design centers, silicon, gallium arsenide and indium phosphide fabrication, manufacturing, assembly and test, and operational facilities throughout North America, Europe, Asia and Australia. It also offers foundry services. It offered a portfolio of over 4,500 standard and custom devices, which include integrated circuits, multi-chip modules, power pallets and transistors, diodes, amplifiers, switches and switch limiters, passive and active components and complete subsystems, across more than 40 product lines serving three primary markets, as of September 30, 2016. The Company’s products are RF Power Products, Optoelectronics and Photonic Solutions, among others.

About Nanometrics

Nanometrics Incorporated is a provider of process control metrology and inspection systems used primarily in the fabrication of semiconductors and other solid-state devices, including sensors, optoelectronic devices, high-brightness (HB) light emitting diodes (LEDs), discretes and data storages components. The Company’s automated and integrated metrology systems measure critical dimensions, device structures, topography and various thin film properties, including three-dimensional features and film thickness, as well as optical, electrical and material properties. The Company’s process control solutions are deployed throughout the fabrication process, from front-end-of-line substrate manufacturing, to production of semiconductors and other devices, to three-dimensional wafer-level packaging applications. The Company’s automated systems primarily consist of automated metrology systems that are employed in semiconductor production environments.

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