Broadcom (NASDAQ:AVGO) & Universal Display (NASDAQ:OLED) Head-To-Head Contrast

Broadcom (NASDAQ:AVGO) and Universal Display (NASDAQ:OLED) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Risk and Volatility

Broadcom has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500. Comparatively, Universal Display has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.

Dividends

Broadcom pays an annual dividend of $2.60 per share and has a dividend yield of 0.8%. Universal Display pays an annual dividend of $2.00 per share and has a dividend yield of 2.4%. Broadcom pays out 33.2% of its earnings in the form of a dividend. Universal Display pays out 40.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Broadcom has increased its dividend for 15 consecutive years and Universal Display has increased its dividend for 8 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and price targets for Broadcom and Universal Display, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadcom	0	5	39	1	2.91
Universal Display	2	3	3	0	2.12

Broadcom currently has a consensus target price of $530.52, indicating a potential upside of 62.70%. Universal Display has a consensus target price of $114.00, indicating a potential upside of 35.84%. Given Broadcom’s stronger consensus rating and higher possible upside, research analysts clearly believe Broadcom is more favorable than Universal Display.

Institutional and Insider Ownership

76.4% of Broadcom shares are owned by institutional investors. Comparatively, 78.2% of Universal Display shares are owned by institutional investors. 1.9% of Broadcom shares are owned by company insiders. Comparatively, 2.2% of Universal Display shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Broadcom and Universal Display’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadcom	42.94%	48.33%	23.78%
Universal Display	36.74%	12.20%	10.90%

Valuation & Earnings

This table compares Broadcom and Universal Display”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadcom	$89.10 billion	17.47	$23.13 billion	$7.83	41.64
Universal Display	$650.61 million	5.81	$242.07 million	$4.93	17.02

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

Summary

Broadcom beats Universal Display on 14 of the 18 factors compared between the two stocks.

About Broadcom

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices. The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.

About Universal Display

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications in the United States and internationally. The company offers PHOLED technologies and materials for displays and lighting products under the UniversalPHOLED brand. It is also involved in the research, development, and commercialization of other OLED device and manufacturing technologies, including FOLED that are flexible OLEDs for the fabrication of OLEDs on flexible substrates; and OVJP, an organic vapor jet printing technology. In addition, the company provides technology development and support services, including third-party collaboration and support to third parties for the commercialization of their OLED products; and contract research services in the areas of chemical synthesis research, development, and commercialization for non-OLED applications, as well as engages in the intellectual property and technology licensing activities. Universal Display Corporation was founded in 1985 and is headquartered in Ewing, New Jersey.