Brooks Automation (NASDAQ:BRKS) and Ultra Clean (NASDAQ:UCTT) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.
Institutional and Insider Ownership
95.3% of Brooks Automation shares are held by institutional investors. Comparatively, 79.9% of Ultra Clean shares are held by institutional investors. 1.6% of Brooks Automation shares are held by insiders. Comparatively, 2.2% of Ultra Clean shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Brooks Automation and Ultra Clean, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Brooks Automation | 0 | 2 | 5 | 0 | 2.71 |
Ultra Clean | 0 | 0 | 5 | 0 | 3.00 |
Brooks Automation presently has a consensus target price of $81.8750, suggesting a potential downside of 14.45%. Ultra Clean has a consensus target price of $49.80, suggesting a potential downside of 9.54%. Given Ultra Clean's stronger consensus rating and higher probable upside, analysts plainly believe Ultra Clean is more favorable than Brooks Automation.
Valuation and Earnings
This table compares Brooks Automation and Ultra Clean's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Brooks Automation | $897.27 million | 7.92 | $64.85 million | $1.26 | 75.95 |
Ultra Clean | $1.07 billion | 2.10 | $-9,400,000.00 | $0.91 | 60.49 |
Brooks Automation has higher earnings, but lower revenue than Ultra Clean. Ultra Clean is trading at a lower price-to-earnings ratio than Brooks Automation, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Brooks Automation has a beta of 1.97, meaning that its stock price is 97% more volatile than the S&P 500. Comparatively, Ultra Clean has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500.
Profitability
This table compares Brooks Automation and Ultra Clean's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Brooks Automation | 7.23% | 7.95% | 6.13% |
Ultra Clean | 3.40% | 18.22% | 8.21% |
Summary
Ultra Clean beats Brooks Automation on 7 of the 13 factors compared between the two stocks.