MKS (NASDAQ:MKSI) vs. Ultra Clean (NASDAQ:UCTT) Critical Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ultra Clean	1.09%	12.00%	4.76%
MKS	12.64%	28.77%	9.51%

Analyst Recommendations

This is a summary of current recommendations and price targets for Ultra Clean and MKS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ultra Clean	1	1	6	0	2.62
MKS	1	2	11	1	2.80

Ultra Clean currently has a consensus target price of $114.00, suggesting a potential upside of 137.01%. MKS has a consensus target price of $366.77, suggesting a potential upside of 65.58%. Given Ultra Clean’s higher possible upside, analysts plainly believe Ultra Clean is more favorable than MKS.

Risk & Volatility

Ultra Clean has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500. Comparatively, MKS has a beta of 2.14, suggesting that its stock price is 114% more volatile than the S&P 500.

Valuation and Earnings

This table compares Ultra Clean and MKS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ultra Clean	$2.44 billion	0.94	-$181.20 million	$0.57	84.39
MKS	$3.93 billion	3.81	$295.00 million	$8.43	26.28

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

Institutional and Insider Ownership

96.1% of Ultra Clean shares are owned by institutional investors. Comparatively, 99.8% of MKS shares are owned by institutional investors. 1.8% of Ultra Clean shares are owned by company insiders. Comparatively, 0.6% of MKS shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

MKS beats Ultra Clean on 12 of the 15 factors compared between the two stocks.

About Ultra Clean

Ultra Clean Holdings, Inc. (NASDAQ: UCTT) provides products and services used in the manufacture of semiconductor and other high-technology equipment. Its offerings include critical subsystems, components and assemblies, along with engineering and manufacturing services that help equipment makers design, build and support their systems. The company’s products include gas and chemical delivery systems, fluid and precision-engineered components, and assemblies made for use in demanding manufacturing environments.

About MKS

MKS Inc. develops technologies used to manufacture semiconductor devices and other advanced products. Its offerings include instruments, components, subsystems and systems that measure and control pressure, gas flow, gas composition, power and other process conditions. The company also provides laser and photonics technologies, motion-control solutions, and specialty chemicals and plating equipment. These products support semiconductor fabrication and packaging, electronics manufacturing, life sciences and a range of industrial applications.