ASML (NASDAQ:ASML) and MKS (NASDAQ:MKSI) Financial Comparison

MKS (NASDAQ:MKSI) and ASML (NASDAQ:ASML) are both large-cap technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Analyst Ratings

This is a summary of current ratings and price targets for MKS and ASML, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MKS	1	2	11	1	2.80
ASML	3	2	17	2	2.75

MKS currently has a consensus target price of $366.77, indicating a potential upside of 90.76%. ASML has a consensus target price of $2,204.71, indicating a potential upside of 54.74%. Given MKS’s stronger consensus rating and higher probable upside, research analysts plainly believe MKS is more favorable than ASML.

Dividends

MKS pays an annual dividend of $1.00 per share and has a dividend yield of 0.5%. ASML pays an annual dividend of $7.13 per share and has a dividend yield of 0.5%. MKS pays out 11.9% of its earnings in the form of a dividend. ASML pays out 17.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. MKS is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares MKS and ASML”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MKS	$3.93 billion	3.31	$295.00 million	$8.43	22.81
ASML	$36.95 billion	14.86	$10.87 billion	$40.62	35.08

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

Profitability

This table compares MKS and ASML’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MKS	12.64%	28.77%	9.51%
ASML	34.10%	64.24%	26.08%

Risk and Volatility

MKS has a beta of 2.14, meaning that its share price is 114% more volatile than the S&P 500. Comparatively, ASML has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500.

Insider and Institutional Ownership

99.8% of MKS shares are owned by institutional investors. Comparatively, 26.1% of ASML shares are owned by institutional investors. 0.6% of MKS shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

ASML beats MKS on 10 of the 17 factors compared between the two stocks.

About MKS

MKS Instruments, Inc. provides foundational technology solutions to semiconductor manufacturing, electronics and packaging, and specialty industrial applications in the United States, Germany, China, South Korea, and internationally. It operates through Vacuum Solutions Division (VSD), Photonics Solutions Division (PSD), and Material Solutions Division (MSD) segments. The VSD segment provides foundational technology solutions, including pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, and vacuum technology. The PSD segment offers range of solutions, which include lasers, beam measurement and profiling, precision motion control, vibration isolation systems, photonics instruments, temperature sensing, opto-mechanical components, optical elements, systems for flexible PCB laser processing, and laser-based systems, as well as high density interconnect PCB and package manufacturing. The MSD segment develops, process, and manufactures technologies comprising advanced surface modification, electroless and electrolytic plating, and surface finishing for chemistry, equipment, software, and services markets, as well as high-technology applications. In addition, the company sells its products and services through direct sales, network of independent distributors, and sales representatives, as well as websites, including product catalogs. The company was incorporated in 1961 and is headquartered in Andover, Massachusetts.

About ASML

ASML Holding N.V. develops, produces, markets, sells, and services advanced semiconductor equipment systems for chipmakers. It offers advanced semiconductor equipment systems, including lithography, metrology, and inspection systems. The company also provides extreme ultraviolet lithography systems; and deep ultraviolet lithography systems comprising immersion and dry lithography solutions to manufacture various range of semiconductor nodes and technologies. In addition, it offers metrology and inspection systems, including YieldStar optical metrology systems to assess the quality of patterns on the wafers; and HMI electron beam solutions to locate and analyze individual chip defects. Further, the company provides computational lithography solutions, and lithography systems and control software solutions; and refurbishes and upgrades lithography systems, as well as offers customer support and related services. It operates in Japan, South Korea, Singapore, Taiwan, China, rest of Asia, the Netherlands, rest of Europe, the Middle East, Africa, and the United States. The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.