Diodes (NASDAQ:DIOD) & PDF Solutions (NASDAQ:PDFS) Head-To-Head Review

PDF Solutions (NASDAQ:PDFS) and Diodes (NASDAQ:DIOD) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for PDF Solutions and Diodes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDF Solutions	0	2	3	0	2.60
Diodes	0	1	3	1	3.00

PDF Solutions currently has a consensus target price of $63.00, suggesting a potential upside of 41.64%. Diodes has a consensus target price of $135.00, suggesting a potential upside of 48.68%. Given Diodes’ stronger consensus rating and higher probable upside, analysts clearly believe Diodes is more favorable than PDF Solutions.

Profitability

This table compares PDF Solutions and Diodes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PDF Solutions	4.27%	7.21%	4.83%
Diodes	5.27%	4.33%	3.41%

Volatility and Risk

PDF Solutions has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Diodes has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500.

Earnings & Valuation

This table compares PDF Solutions and Diodes”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PDF Solutions	$219.02 million	8.11	-$640,000.00	$0.25	177.92
Diodes	$1.48 billion	2.82	$66.14 million	$1.85	49.08

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

Insider & Institutional Ownership

79.5% of PDF Solutions shares are held by institutional investors. Comparatively, 99.2% of Diodes shares are held by institutional investors. 11.1% of PDF Solutions shares are held by insiders. Comparatively, 1.7% of Diodes shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Diodes beats PDF Solutions on 9 of the 14 factors compared between the two stocks.

About PDF Solutions

PDF Solutions, Inc. provides proprietary software and physical intellectual property products for integrated circuit designs, electrical measurement hardware tools, proven methodologies, and professional services in the United States, China, Japan, and internationally. The company offers Exensio software products, such as Manufacturing Analytics that store collected data in a common environment with a consistent view for enabling product engineers to identify and analyze production yield, performance, reliability, and other issues; Process Control that provides failure detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Test Operations that offer data collection and analysis capabilities; and Assembly Operations that provide device manufacturers with the capability to link assembly and packaging data, including fabrication and characterization data over the product life cycle. It also provides Design-For-Inspection (DFI) systems, such as DFI On-Chip Instruments; eProbe Non-Contact E-Beam Tool; and Characterization Vehicle (CV) system, which includes CV Test Chips and pdFasTest Electrical Testers, as well as Exensio characterization software, designed to analyze the measurements collected using the eProbe tool. In addition, the company offers Cimetrix software products that enables equipment manufacturers to provide industry standard interfaces on their products; and software-as-a-service, software related services, and characterization services. It sells its technologies and services through direct sales force, service teams, and strategic alliances to integrated device manufacturers, fabless semiconductor companies, foundries, equipment manufacturers, electronics manufacturing suppliers, original device manufacturers, out-sourced semiconductor assembly and test, and system houses. PDF Solutions, Inc. was founded in 1991 and is headquartered in Santa Clara, California.

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.