Head to Head Review: Diodes (NASDAQ:DIOD) and SmartKem (NASDAQ:SMTK)

Diodes (NASDAQ:DIOD) and SmartKem (NASDAQ:SMTK) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Diodes and SmartKem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diodes	4.59%	2.98%	2.35%
SmartKem	N/A	-321.41%	-172.10%

Institutional & Insider Ownership

99.2% of Diodes shares are owned by institutional investors. 1.9% of Diodes shares are owned by insiders. Comparatively, 8.7% of SmartKem shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Diodes has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500. Comparatively, SmartKem has a beta of 4.72, indicating that its stock price is 372% more volatile than the S&P 500.

Earnings and Valuation

This table compares Diodes and SmartKem”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diodes	$1.31 billion	2.02	$44.02 million	$1.37	41.64
SmartKem	$97,000.00	96.97	-$10.33 million	($2.68)	-0.77

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Diodes and SmartKem, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diodes	0	3	2	1	2.67
SmartKem	1	0	0	0	1.00

Diodes presently has a consensus price target of $55.00, indicating a potential downside of 3.59%. Given Diodes’ stronger consensus rating and higher possible upside, research analysts clearly believe Diodes is more favorable than SmartKem.

Summary

Diodes beats SmartKem on 12 of the 15 factors compared between the two stocks.

About Diodes

Diodes Incorporated, together with its subsidiaries, manufactures and supplies application-specific standard products in the broad discrete, logic, analog, and mixed-signal semiconductor markets worldwide. The company offers discrete semiconductor products, such as MOSFETs, SiC MOSFETs; data line protection, power line protection, thyristers, USB Type-C protection, and transient voltage suppressors; Schottky, small signal switching, Zener, and SiC diodes; bridges, super barrier, Schottky, Schottky bridge, and fast/ultra-fast rectifiers; and bipolar, avalanche, gate driver, and pre-bias transistors. It also provides analog products, including power management devices comprising AC-DC and DC-DC converters, USB power switches, low dropout, photocoupler and linear voltage regulators; standard linear devices consisting of operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, such as hall-effect sensors and motor drivers. In addition, the company offers mixed-signal products, such as high speed mux/demux, digital switches, interface, redrivers, universal level shifters/voltage translators, clock ICs and packet switches; standard logic products comprising low-voltage complementary metal-oxide-semiconductor (CMOS) and advanced high-speed CMOS devices; ultra-low power CMOS logic; and analog switches; multichip products and co-packaged discrete, analog and mixed-signal silicon in miniature packages; and silicon and silicon epitaxial wafers used in manufacturing frequency control products and contact images sensors. It serves the industrial, automotive, computing, communications, and consumer markets through direct sales, marketing personnel, independent sales representatives, and distributors. The company was incorporated in 1959 and is headquartered in Plano, Texas.

About SmartKem

SmartKem, Inc. develops electronics transistors using its proprietary advanced semiconductor materials. Its technology can be used in a range of applications including next generation MicroLED, LCD and AMOLED displays, as well as advanced computer and AI chip packaging, and a new type of sensor. The company was founded on September 21, 2018 and is headquartered in Blackley, the United Kingdom.