Financial Comparison: Onto Innovation (NYSE:ONTO) versus Amtech Systems (NASDAQ:ASYS)

Amtech Systems (NASDAQ:ASYS) and Onto Innovation (NYSE:ONTO) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Amtech Systems and Onto Innovation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amtech Systems	0	3	1	0	2.25
Onto Innovation	0	1	10	2	3.08

Amtech Systems presently has a consensus target price of $22.00, suggesting a potential upside of 50.68%. Onto Innovation has a consensus target price of $380.30, suggesting a potential upside of 49.16%. Given Amtech Systems’ higher possible upside, analysts plainly believe Amtech Systems is more favorable than Onto Innovation.

Institutional & Insider Ownership

50.2% of Amtech Systems shares are owned by institutional investors. Comparatively, 98.3% of Onto Innovation shares are owned by institutional investors. 26.9% of Amtech Systems shares are owned by insiders. Comparatively, 0.5% of Onto Innovation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Amtech Systems and Onto Innovation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amtech Systems	4.90%	6.33%	4.00%
Onto Innovation	11.84%	13.44%	10.30%

Volatility & Risk

Amtech Systems has a beta of 2.01, indicating that its share price is 101% more volatile than the S&P 500. Comparatively, Onto Innovation has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500.

Valuation & Earnings

This table compares Amtech Systems and Onto Innovation”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amtech Systems	$81.67 million	3.13	-$30.33 million	$0.26	56.15
Onto Innovation	$1.12 billion	11.17	$136.76 million	$2.66	95.85

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

Summary

Onto Innovation beats Amtech Systems on 12 of the 15 factors compared between the two stocks.

About Amtech Systems

Amtech Systems, Inc. manufactures and sells capital equipment and related consumables for use in fabricating silicon carbide (SiC), silicon power devices, analog and discrete devices, electronic assemblies, and light-emitting diodes (LEDs) worldwide. The company operates through Semiconductor and Material and Substrate segments. The Semiconductor segment designs, manufactures, sells, and services thermal processing equipment, including solder reflow ovens, horizontal diffusion furnaces, and custom high-temp belt furnaces for use by semiconductor, electronics, and electro/mechanical assembly manufacturers; and diffusion and reflow thermal systems, as well as wafer cleaning equipment and related services. The Material and Substrate segment manufactures and sells consumables and machinery for lapping and polishing of materials, such as silicon wafers for semiconductor products; sapphire substrates for LED lighting and mobile devices; silicon carbide wafers for LED and power device applications; various glass and silica components for 3D image transmission; quartz and ceramic components for telecommunications devices; and medical device components, and optical and photonics applications. It also offers substrate products comprising of double-sided wafer cleaning system, entegrity head tester, substrate carrier, substrate polishing templates, double-sided lapping and polishing machines, single-sided polisher, and substrate process chemicals. The company sells its products through sales personnel, as well as a network of independent sales representatives and distributors. Amtech Systems, Inc. was incorporated in 1981 and is headquartered in Tempe, Arizona.

About Onto Innovation

Onto Innovation Inc. engages in the design, development, manufacture, and support of process control tools that performs optical metrology. The company offers lithography systems and process control analytical software. It also offers process and yield management solutions, and device packaging and test facilities through standalone systems for optical metrology, macro-defect inspection, packaging lithography, and transparent and opaque thin film measurements. In addition, the company provides process control software portfolio that includes solutions for standalone tools, groups of tools, and enterprise-or factory-wide suites. Further, it engages in systems software, spare parts, and other services, as well as offers software licensing services. The company's products are used in semiconductor and advanced packaging device manufacturers; silicon wafer; light emitting diode; vertical-cavity surface-emitting laser; micro-electromechanical system; CMOS image sensor; power device; analog device; RF filter; data storage; and various industrial and scientific applications. Onto Innovation Inc. was founded in 1940 and is headquartered in Wilmington, Massachusetts.