Head to Head Comparison: MKS (NASDAQ:MKSI) and Universal Display (NASDAQ:OLED)

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

Earnings and Valuation

This table compares Universal Display and MKS”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Display	$650.61 million	5.44	$242.07 million	$4.13	18.65
MKS	$3.93 billion	4.56	$295.00 million	$6.27	42.32

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

Insider and Institutional Ownership

78.2% of Universal Display shares are owned by institutional investors. Comparatively, 99.8% of MKS shares are owned by institutional investors. 2.2% of Universal Display shares are owned by company insiders. Comparatively, 0.6% of MKS shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Universal Display pays an annual dividend of $2.00 per share and has a dividend yield of 2.6%. MKS pays an annual dividend of $1.00 per share and has a dividend yield of 0.4%. Universal Display pays out 48.4% of its earnings in the form of a dividend. MKS pays out 15.9% 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. Universal Display has increased its dividend for 8 consecutive years. Universal Display is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Universal Display and MKS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Display	1	4	3	0	2.25
MKS	1	2	12	1	2.81

Universal Display currently has a consensus target price of $116.33, suggesting a potential upside of 51.00%. MKS has a consensus target price of $375.93, suggesting a potential upside of 41.67%. Given Universal Display’s higher probable upside, analysts clearly believe Universal Display is more favorable than MKS.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Universal Display	32.24%	11.35%	10.17%
MKS	10.15%	24.72%	7.80%

Risk and Volatility

Universal Display has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, MKS has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500.

Summary

MKS beats Universal Display on 11 of the 18 factors compared between the two stocks.

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.

About MKS

MKS Instruments, Inc. provides foundational technology solutions to semiconductor manufacturing, electronics and packaging, and specialty industrial applications in the United States, Germany, China, South Korea, and internationally. It operates through Vacuum Solutions Division (VSD), Photonics Solutions Division (PSD), and Material Solutions Division (MSD) segments. The VSD segment provides foundational technology solutions, including pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, and vacuum technology. The PSD segment offers range of solutions, which include lasers, beam measurement and profiling, precision motion control, vibration isolation systems, photonics instruments, temperature sensing, opto-mechanical components, optical elements, systems for flexible PCB laser processing, and laser-based systems, as well as high density interconnect PCB and package manufacturing. The MSD segment develops, process, and manufactures technologies comprising advanced surface modification, electroless and electrolytic plating, and surface finishing for chemistry, equipment, software, and services markets, as well as high-technology applications. In addition, the company sells its products and services through direct sales, network of independent distributors, and sales representatives, as well as websites, including product catalogs. The company was incorporated in 1961 and is headquartered in Andover, Massachusetts.