Comparing First Solar (NASDAQ:FSLR) and Diodes (NASDAQ:DIOD)

First Solar (NASDAQ:FSLR) and Diodes (NASDAQ:DIOD) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Insider and Institutional Ownership

92.1% of First Solar shares are held by institutional investors. Comparatively, 99.2% of Diodes shares are held by institutional investors. 0.4% of First Solar shares are held by company insiders. Comparatively, 1.7% of Diodes shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

First Solar has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, Diodes has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for First Solar and Diodes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Solar	2	11	22	2	2.65
Diodes	0	2	4	0	2.67

First Solar currently has a consensus target price of $264.97, indicating a potential upside of 49.01%. Diodes has a consensus target price of $135.00, indicating a potential upside of 42.20%. Given First Solar’s higher possible upside, research analysts plainly believe First Solar is more favorable than Diodes.

Profitability

This table compares First Solar and Diodes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Solar	32.47%	18.02%	13.05%
Diodes	5.27%	4.33%	3.41%

Earnings & Valuation

This table compares First Solar and Diodes”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Solar	$5.38 billion	3.55	$1.53 billion	$16.22	10.96
Diodes	$1.48 billion	2.95	$66.14 million	$1.85	51.32

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

Summary

First Solar beats Diodes on 10 of the 15 factors compared between the two stocks.

About First Solar

First Solar, Inc., a solar technology company, provides photovoltaic (PV) solar energy solutions in the United States, France, Japan, Chile, and internationally. The company manufactures and sells PV solar modules with a thin film semiconductor technology that provides a lower-carbon alternative to conventional crystalline silicon PV solar modules. It designs, manufactures, and sells cadmium telluride solar modules that converts sunlight into electricity. The company's residual business operations include project development activities, operations and maintenance services, and the sale of PV solar power systems to third-party customers. It serves developers and operators of systems, utilities, independent power producers, commercial and industrial companies, and other system owners. The company was formerly known as First Solar Holdings, Inc. and changed its name to First Solar, Inc. in 2006. First Solar, Inc. was founded in 1999 and is headquartered in Tempe, Arizona.

About Diodes

Diodes Incorporated, together with its subsidiaries, manufactures and supplies application-specific standard products in the broad discrete, logic, analog, and mixed-signal semiconductor markets worldwide. The company offers discrete semiconductor products, such as MOSFETs, SiC MOSFETs; data line protection, power line protection, thyristers, USB Type-C protection, and transient voltage suppressors; Schottky, small signal switching, Zener, and SiC diodes; bridges, super barrier, Schottky, Schottky bridge, and fast/ultra-fast rectifiers; and bipolar, avalanche, gate driver, and pre-bias transistors. It also provides analog products, including power management devices comprising AC-DC and DC-DC converters, USB power switches, low dropout, photocoupler and linear voltage regulators; standard linear devices consisting of operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, such as hall-effect sensors and motor drivers. In addition, the company offers mixed-signal products, such as high speed mux/demux, digital switches, interface, redrivers, universal level shifters/voltage translators, clock ICs and packet switches; standard logic products comprising low-voltage complementary metal-oxide-semiconductor (CMOS) and advanced high-speed CMOS devices; ultra-low power CMOS logic; and analog switches; multichip products and co-packaged discrete, analog and mixed-signal silicon in miniature packages; and silicon and silicon epitaxial wafers used in manufacturing frequency control products and contact images sensors. It serves the industrial, automotive, computing, communications, and consumer markets through direct sales, marketing personnel, independent sales representatives, and distributors. The company was incorporated in 1959 and is headquartered in Plano, Texas.