Cohu (COHU) & Photronics (PLAB) Head-To-Head Review

Cohu (NASDAQ: COHU) and Photronics (NASDAQ:PLAB) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Profitability

This table compares Cohu and Photronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cohu 6.21% 11.59% 7.76%
Photronics 2.97% 1.33% 1.12%

Dividends

Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Photronics does not pay a dividend. Cohu pays out 34.8% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Cohu and Photronics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cohu $314.92 million 2.18 $37.41 million $0.69 35.51
Photronics $437.08 million 1.48 $111.14 million $0.20 47.00

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

Institutional & Insider Ownership

83.9% of Cohu shares are held by institutional investors. Comparatively, 96.0% of Photronics shares are held by institutional investors. 6.5% of Cohu shares are held by company insiders. Comparatively, 3.7% of Photronics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Cohu and Photronics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cohu 0 1 3 0 2.75
Photronics 0 2 0 0 2.00

Cohu currently has a consensus target price of $23.75, indicating a potential downside of 3.06%. Given Cohu’s stronger consensus rating and higher probable upside, analysts plainly believe Cohu is more favorable than Photronics.

Risk and Volatility

Cohu has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Photronics has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Summary

Cohu beats Photronics on 11 of the 16 factors compared between the two stocks.

Cohu Company Profile

Cohu, Inc. is a supplier of semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors and thermal sub-systems used by global semiconductor manufacturers and test subcontractors. It develops, manufactures, sells and services a line of equipment capable of handling a range of integrated circuits and light-emitting diodes. It operates through semiconductor equipment segment. It offers products for the pick-and-place, gravity-feed, test-in-strip and turret handling, MEMS, burn-in and system-level test markets. It sells various products, including Delta MATRiX, Delta Pyramid, Delta Eclipse, Delta LinX, Rasco SO1000, Rasco SO2000, Rasco Saturn and Jupiter, Rasco Jaguar, Ismeca NY32, Ismeca NY20 and Delta Fusion HD. Its manufacturing operations are located in Malacca, Malaysia (handlers); Poway, California (thermal subsystems); Laguna, the Philippines (kits and contactors); Kolbermoor, Germany (handlers), and Osaka, Japan (contactors).

Photronics Company Profile

Photronics, Inc. is a manufacturer of photomasks, which are photographic quartz plates containing microscopic images of electronic circuits. As of October 30, 2016, the Company operated principally from nine manufacturing facilities: two located in Europe, three in Taiwan, one in Korea and three in the United States. Photomasks are used in the manufacture of semiconductors and flat panel displays (FPDs), and are used as masters to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits (ICs), and a range of FPDs and other types of electrical and optical components. The Company offers reticle and photomask maintenance, including pellicle replacement, mask cleaning and re-certification, at all its sites across the world. Its products include Mature Binary, Advanced Binary Reticles, Phase Shift Masks-Embedded Attenuated Phase Shift Masks (EAPSM), Other Advanced Products and Large Area Masks.

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