Nanometrics (NASDAQ: NANO) and Ultra Clean Holdings (NASDAQ:UCTT) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Analyst Ratings

This is a summary of current recommendations for Nanometrics and Ultra Clean Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nanometrics 0 0 3 0 3.00
Ultra Clean Holdings 0 3 3 0 2.50

Nanometrics presently has a consensus target price of $31.67, suggesting a potential upside of 10.03%. Ultra Clean Holdings has a consensus target price of $28.40, suggesting a potential downside of 7.37%. Given Nanometrics’ stronger consensus rating and higher possible upside, research analysts plainly believe Nanometrics is more favorable than Ultra Clean Holdings.

Valuation & Earnings

This table compares Nanometrics and Ultra Clean Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nanometrics $241.61 million 3.04 $41.73 million $1.88 15.31
Ultra Clean Holdings $753.55 million 1.36 $74.66 million $1.39 22.06

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

Institutional & Insider Ownership

81.3% of Nanometrics shares are owned by institutional investors. Comparatively, 77.6% of Ultra Clean Holdings shares are owned by institutional investors. 6.7% of Nanometrics shares are owned by company insiders. Comparatively, 2.6% of Ultra Clean Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Nanometrics and Ultra Clean Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nanometrics 19.94% 11.95% 10.01%
Ultra Clean Holdings 6.25% 24.16% 13.62%

Volatility & Risk

Nanometrics has a beta of 1.8, indicating that its share price is 80% more volatile than the S&P 500. Comparatively, Ultra Clean Holdings has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Summary

Nanometrics beats Ultra Clean Holdings on 8 of the 13 factors compared between the two stocks.

Nanometrics Company Profile

Nanometrics Incorporated is a provider of process control metrology and inspection systems used primarily in the fabrication of semiconductors and other solid-state devices, including sensors, optoelectronic devices, high-brightness (HB) light emitting diodes (LEDs), discretes and data storages components. The Company’s automated and integrated metrology systems measure critical dimensions, device structures, topography and various thin film properties, including three-dimensional features and film thickness, as well as optical, electrical and material properties. The Company’s process control solutions are deployed throughout the fabrication process, from front-end-of-line substrate manufacturing, to production of semiconductors and other devices, to three-dimensional wafer-level packaging applications. The Company’s automated systems primarily consist of automated metrology systems that are employed in semiconductor production environments.

Ultra Clean Holdings Company Profile

Ultra Clean Holdings, Inc. is engaged in the design, engineering and manufacture of production tools, modules and subsystems the semiconductor capital equipment industry. The Company’s products include precision robotic solutions; gas delivery systems; a range of industrial and automation production equipment products; subsystems that includes wafer cleaning sub-systems, chemical delivery modules, top-plate assemblies, frame assemblies, and process modules. The Company offers its products for the semiconductor capital equipment and equipment industry segments. It also sells to the consumer, medical, energy, industrial, flat panel and research equipment industries. The Company is focused on providing specialized engineering and manufacturing solutions for these applications. It provides its original equipment manufacturing (OEM) customers an outsourced solution for the development, design, component sourcing, prototyping, engineering, manufacturing and testing of various systems.

Receive News & Stock Ratings for Nanometrics Incorporated Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Nanometrics Incorporated and related stocks with our FREE daily email newsletter.