Critical Survey: Canadian Solar (NASDAQ:CSIQ) versus MKS (NASDAQ:MKSI)

MKS (NASDAQ:MKSI) and Canadian Solar (NASDAQ:CSIQ) are both technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Risk & Volatility

MKS has a beta of 2.03, suggesting that its share price is 103% more volatile than the S&P 500. Comparatively, Canadian Solar has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for MKS and Canadian Solar, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MKS	1	2	12	1	2.81
Canadian Solar	4	6	3	0	1.92

MKS currently has a consensus target price of $375.93, indicating a potential upside of 38.60%. Canadian Solar has a consensus target price of $17.75, indicating a potential upside of 57.47%. Given Canadian Solar’s higher possible upside, analysts clearly believe Canadian Solar is more favorable than MKS.

Profitability

This table compares MKS and Canadian Solar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MKS	10.15%	24.72%	7.80%
Canadian Solar	-3.73%	-5.57%	-1.43%

Insider & Institutional Ownership

99.8% of MKS shares are held by institutional investors. Comparatively, 52.4% of Canadian Solar shares are held by institutional investors. 0.6% of MKS shares are held by insiders. Comparatively, 21.5% of Canadian Solar shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares MKS and Canadian Solar”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MKS	$3.93 billion	4.67	$295.00 million	$6.27	43.26
Canadian Solar	$5.60 billion	0.14	-$104.13 million	($3.84)	-2.93

MKS has higher earnings, but lower revenue than Canadian Solar. Canadian Solar is trading at a lower price-to-earnings ratio than MKS, indicating that it is currently the more affordable of the two stocks.

Summary

MKS beats Canadian Solar on 12 of the 15 factors compared between the two stocks.

About MKS

MKS Instruments, Inc. provides foundational technology solutions to semiconductor manufacturing, electronics and packaging, and specialty industrial applications in the United States, Germany, China, South Korea, and internationally. It operates through Vacuum Solutions Division (VSD), Photonics Solutions Division (PSD), and Material Solutions Division (MSD) segments. The VSD segment provides foundational technology solutions, including pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, and vacuum technology. The PSD segment offers range of solutions, which include lasers, beam measurement and profiling, precision motion control, vibration isolation systems, photonics instruments, temperature sensing, opto-mechanical components, optical elements, systems for flexible PCB laser processing, and laser-based systems, as well as high density interconnect PCB and package manufacturing. The MSD segment develops, process, and manufactures technologies comprising advanced surface modification, electroless and electrolytic plating, and surface finishing for chemistry, equipment, software, and services markets, as well as high-technology applications. In addition, the company sells its products and services through direct sales, network of independent distributors, and sales representatives, as well as websites, including product catalogs. The company was incorporated in 1961 and is headquartered in Andover, Massachusetts.

About Canadian Solar

Canadian Solar Inc., together with its subsidiaries, provides solar energy and battery energy storage products and solutions in in Asia, the Americas, Europe, and internationally. The company operates through two segments, CSI Solar and Recurrent Energy. The CSI Solar segment designs, develops, and manufactures solar ingots, wafers, cells, modules, and other solar power and battery storage products. It offers standard solar modules and battery storage solutions; solar system kits, such as inverters, racking systems, and other accessories; power electronic products; and engineering, procurement, and construction (EPC) services, as well as operates battery energy storage projects. The Recurrent Energy segment engages in the development, construction, maintenance, and sale of solar power and battery storage projects; and operation of solar power plants; and sale of electricity. This segment provides operation and maintenance (O&M) services, including monitoring, inspections, repair, and replacement of plant equipment; and site management and administrative support services for solar projects, as well as asset management services. It has a fleet of solar and battery energy storage plants in operation with an aggregate capacity of approximately 1,005 MWp and 600 MWh. It serves distributors, system integrators, project developers, and installers/EPC companies, as well as utility companies or grid operators, public utilities, licensed suppliers, corporate offtakers, and commercial, industrial or government end users. It sells its products primarily under its Canadian Solar brand name. Canadian Solar Inc. was incorporated in 2001 and is based in Guelph, Canada.