Head-To-Head Analysis: Ultra Clean (NASDAQ:UCTT) versus onsemi (NASDAQ:ON)

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for onsemi and Ultra Clean, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
onsemi	1	14	14	0	2.45
Ultra Clean	1	0	5	1	2.86

onsemi presently has a consensus price target of $100.62, suggesting a potential upside of 30.83%. Ultra Clean has a consensus price target of $129.00, suggesting a potential upside of 60.85%. Given Ultra Clean’s stronger consensus rating and higher probable upside, analysts clearly believe Ultra Clean is more favorable than onsemi.

Risk & Volatility

onsemi has a beta of 2.03, suggesting that its stock price is 103% more volatile than the S&P 500. Comparatively, Ultra Clean has a beta of 1.88, suggesting that its stock price is 88% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
onsemi	10.17%	14.06%	8.31%
Ultra Clean	-1.07%	6.99%	2.89%

Insider & Institutional Ownership

97.7% of onsemi shares are owned by institutional investors. Comparatively, 96.1% of Ultra Clean shares are owned by institutional investors. 0.4% of onsemi shares are owned by company insiders. Comparatively, 1.8% of Ultra Clean shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares onsemi and Ultra Clean”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
onsemi	$6.20 billion	4.86	$121.00 million	$1.56	49.30
Ultra Clean	$2.05 billion	1.75	-$181.20 million	($4.29)	-18.69

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

Summary

onsemi beats Ultra Clean on 11 of the 15 factors compared between the two stocks.

About onsemi

onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions. The Advanced Solutions Group segment is involved in the designing and developing of analog, mixed-signal, advanced logic, ASSPs and ASICs, Wi-Fi and power solutions for a broad base of end-users in the automotive, consumer, computing, industrial, communications, medical and aerospace/defense markets. The Intelligent Sensing Group segment is focused on the designing and developing of CMOS and CCD image sensors, as well as proximity sensors, image signal processors, single photon detectors, inclu

About Ultra Clean

Ultra Clean Holdings, Inc. develops and supplies critical subsystems, components and parts, and ultra-high purity cleaning and analytical services for the semiconductor industry in the United States and internationally. The company provides ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, and gas line and component heaters; chemical delivery modules that deliver gases and reactive chemicals in a liquid or gaseous form from a centralized subsystem to the reaction chamber; and gas delivery systems, such as weldments, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system. It also offers various industrial and automation production equipment; fluid delivery systems consist of one or more chemical delivery units, including PFA tubing, filters, flow controllers, regulators, component heaters, and an integrated electronic and/or pneumatic control system; precision robotic systems; top-plate assemblies; frame assemblies; process modules, a subsystem of semiconductor manufacturing tools that process integrated circuits onto wafers; and other high-level assemblies. In addition, the company provides tool chamber parts cleaning and coating services; micro-contamination analysis services for tool parts, wafers and depositions, chemicals, cleanroom materials, deionized water, and airborne molecular contamination; and analytical verification services for process tool chamber part cleaning. It primarily serves original equipment manufacturing customers in the semiconductor capital equipment and semiconductor integrated device manufacturing industries, as well as display, consumer, medical, energy, industrial, and research equipment industries. The company was founded in 1991 and is headquartered in Hayward, California.