Critical Review: Synaptics (NASDAQ:SYNA) and Universal Display (NASDAQ:OLED)

Synaptics (NASDAQ:SYNA) and Universal Display (NASDAQ:OLED) are both mid-cap technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Synaptics and Universal Display, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synaptics	1	10	2	1	2.21
Universal Display	1	4	3	0	2.25

Synaptics currently has a consensus target price of $123.09, suggesting a potential upside of 3.10%. Universal Display has a consensus target price of $116.33, suggesting a potential upside of 46.04%. Given Universal Display’s stronger consensus rating and higher possible upside, analysts clearly believe Universal Display is more favorable than Synaptics.

Earnings and Valuation

This table compares Synaptics and Universal Display”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synaptics	$1.20 billion	3.96	-$490.80 million	($12.65)	-9.44
Universal Display	$650.61 million	5.63	$242.07 million	$4.13	19.29

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

Volatility and Risk

Synaptics has a beta of 1.96, indicating that its share price is 96% more volatile than the S&P 500. Comparatively, Universal Display has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.

Institutional and Insider Ownership

99.4% of Synaptics shares are held by institutional investors. Comparatively, 78.2% of Universal Display shares are held by institutional investors. 0.7% of Synaptics shares are held by company insiders. Comparatively, 2.2% of Universal Display shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Synaptics	-41.00%	4.37%	2.27%
Universal Display	32.24%	11.35%	10.17%

Summary

Universal Display beats Synaptics on 11 of the 15 factors compared between the two stocks.

About Synaptics

Synaptics Incorporated develops, markets, and sells semiconductor products worldwide. The company offers AudioSmart for voice and audio processing; ConnectSmart for high-speed video/audio/data connectivity; DisplayLink for transmitting compressed video frames across low bandwidth connections; VideoSmart that enables set-top boxes, over-the-top, streaming devices, soundbars, surveillance cameras, and smart displays; and ImagingSmart solutions. It also provides Natural ID, a fingerprint ID product that is used in notebook personal computers (PCs), PC peripherals, automobiles, and other applications; TouchPad, a touch-sensitive pad that senses the position and movement of one or more fingers on its surface; SecurePad that integrates fingerprint sensor directly into the TouchPad area; ClickPad that offers a clickable mechanical design; and ForcePad. In addition, the company offers ClearPad, which enables users to interact directly with the display on mobile smartphones, tablets, and automobiles; ClearView products that provide advanced image processing and low power technology for displays on smartphones and tablets; and TouchView products, a touch controller and display driver integration product. Further, it provides TouchPad with a pointing stick in a single notebook computer enabling users to select their interface of choice; TouchStyk, a self-contained pointing stick module; ultra-low power edge artificial intelligence platform for battery powered wireless devices; wireless connectivity solutions comprising Wi-Fi, Bluetooth, global positioning system, global navigation satellite system, and ULE; and voice over IP and digital enhanced cordless telecommunications solutions. The company sells its products through direct sales, outside sales representatives, distributors, and resellers to mobile and PC OEMs; IoT OEMs; and automotive and consumer electronics manufacturers. The company was incorporated in 1986 and is headquartered in San Jose, California.

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.