Analyzing Advanced Energy (AEIS) and EMCORE (EMKR)

Advanced Energy (NASDAQ: AEIS) and EMCORE (NASDAQ:EMKR) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Analyst Recommendations

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This is a breakdown of current ratings for Advanced Energy and EMCORE, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Energy 0 2 2 0 2.50
EMCORE 0 1 2 0 2.67

Advanced Energy presently has a consensus target price of $90.33, suggesting a potential upside of 41.37%. EMCORE has a consensus target price of $6.67, suggesting a potential upside of 16.96%. Given Advanced Energy’s higher probable upside, analysts clearly believe Advanced Energy is more favorable than EMCORE.

Institutional and Insider Ownership

94.4% of Advanced Energy shares are owned by institutional investors. Comparatively, 79.5% of EMCORE shares are owned by institutional investors. 1.2% of Advanced Energy shares are owned by insiders. Comparatively, 2.0% of EMCORE shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Advanced Energy has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, EMCORE has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

Valuation & Earnings

This table compares Advanced Energy and EMCORE’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Energy $671.01 million 3.78 $137.86 million $4.23 15.11
EMCORE $122.89 million 1.26 $8.23 million $0.39 14.62

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

Profitability

This table compares Advanced Energy and EMCORE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Energy 20.55% 35.06% 25.41%
EMCORE 5.48% 6.59% 5.56%

Summary

Advanced Energy beats EMCORE on 11 of the 13 factors compared between the two stocks.

About Advanced Energy

Advanced Energy Industries, Inc., together with its subsidiaries, designs, manufactures, sells, and supports power conversion and control products that transform electrical power into various usable forms. It offers process power systems, including direct current (DC), pulsed DC, low frequency, high voltage, and radio frequency (RF) power supplies, as well as matching networks and remote plasma sources for reactive gas applications and RF instrumentation. The company also provides power control modules and thermal instrumentation products for rapid thermal processing, chemical vapor deposition, crystal growing, and other semiconductor and solar applications, as well as in chemical processing, glass manufacturing, and other general industrial power applications; and high voltage products for various applications, including semiconductor wafer processing and metrology, scientific instrumentation, mass spectrometry, industrial printing, and analytical x-ray systems for industrial and analytical applications. In addition, it offers repair services, conversions, upgrades, and refurbishments and used equipment to companies. The company markets and sells its products through direct sales force, independent sales representatives, and distributors in the North America, Europe, and Asia. Advanced Energy Industries, Inc. was founded in 1981 and is headquartered in Fort Collins, Colorado.

About EMCORE

EMCORE Corporation, together with its subsidiaries, provides advanced mixed-signal optics products in California. It offers broadband products comprising cable television; laser, receiver, and photodetector component products; radio frequency over glass FTTP products; satellite/microwave communications products; and wireless communications products. The company also provides chip devices products, including high-power gain chips, GPON fiber-to-the-premises, and data center chip products; and navigation systems products, such as fiber optic gyroscope products and inertial measurement units and navigation systems products. It sells its products through direct sales force, application engineers, third party sales representatives, and distributors. EMCORE Corporation was founded in 1984 and is headquartered in Alhambra, California.

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