Critical Comparison: Amtech Systems (NASDAQ:ASYS) versus Semtech (NASDAQ:SMTC)

Semtech (NASDAQ:SMTC) and Amtech Systems (NASDAQ:ASYS) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.

Profitability

This table compares Semtech and Amtech Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Semtech	13.11%	21.74%	8.98%
Amtech Systems	4.90%	6.33%	4.00%

Risk & Volatility

Semtech has a beta of 2.35, meaning that its share price is 135% more volatile than the S&P 500. Comparatively, Amtech Systems has a beta of 2.01, meaning that its share price is 101% more volatile than the S&P 500.

Institutional & Insider Ownership

50.2% of Amtech Systems shares are owned by institutional investors. 0.4% of Semtech shares are owned by company insiders. Comparatively, 26.9% of Amtech Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Semtech and Amtech Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Semtech	0	3	15	1	2.89
Amtech Systems	0	3	1	0	2.25

Semtech presently has a consensus target price of $204.71, suggesting a potential upside of 12.29%. Amtech Systems has a consensus target price of $22.00, suggesting a potential upside of 39.42%. Given Amtech Systems’ higher probable upside, analysts plainly believe Amtech Systems is more favorable than Semtech.

Earnings & Valuation

This table compares Semtech and Amtech Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Semtech	$1.05 billion	16.20	-$40.38 million	$1.51	120.73
Amtech Systems	$79.36 million	3.48	-$30.33 million	$0.26	60.69

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

Summary

Semtech beats Amtech Systems on 11 of the 15 factors compared between the two stocks.

About Semtech

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor and advanced algorithms. It provides signal integrity products, including a portfolio of optical data communications and video transport products used in various infrastructure, and industrial applications; a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications. The company offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products. In addition, it provides switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging related products. Further, it offers portfolio of IoT solutions, such as modules, gateways, routers, and connected services; and portfolio of connected services, including wireless connectivity and cloud-based services for industrial, medical and communications applications. The company serves original equipment manufacturers and industrial end-markets. It sells its products directly, as well as through independent sales representative firms and independent distributors in Asia- Pacific, North America, and Europe. Semtech Corporation was incorporated in 1960 and is headquartered in Camarillo, California.

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.