Analyzing OSI Systems (NASDAQ:OSIS) and Universal Display (NASDAQ:OLED)

OSI Systems (NASDAQ:OSIS) and Universal Display (NASDAQ:OLED) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Institutional and Insider Ownership

89.2% of OSI Systems shares are owned by institutional investors. Comparatively, 78.2% of Universal Display shares are owned by institutional investors. 4.3% of OSI Systems shares are owned by insiders. Comparatively, 2.2% of Universal Display shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

OSI Systems has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Universal Display has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500.

Profitability

This table compares OSI Systems and Universal Display’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OSI Systems	8.42%	18.84%	7.13%
Universal Display	34.08%	12.34%	11.04%

Earnings & Valuation

This table compares OSI Systems and Universal Display”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OSI Systems	$1.71 billion	2.08	$149.64 million	$8.76	24.72
Universal Display	$626.54 million	6.05	$242.07 million	$4.48	18.09

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

Analyst Ratings

This is a summary of current ratings and price targets for OSI Systems and Universal Display, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OSI Systems	0	1	6	0	2.86
Universal Display	1	2	3	0	2.33

OSI Systems currently has a consensus target price of $294.00, suggesting a potential upside of 35.79%. Universal Display has a consensus target price of $130.60, suggesting a potential upside of 61.15%. Given Universal Display’s higher probable upside, analysts clearly believe Universal Display is more favorable than OSI Systems.

Summary

OSI Systems beats Universal Display on 8 of the 14 factors compared between the two stocks.

About OSI Systems

OSI Systems, Inc. designs and manufactures electronic systems and components. It operates in three segments: Security, Healthcare, and Optoelectronics and Manufacturing. The Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation monitoring, explosive and narcotics trace detection systems, and optical inspection systems under the Rapiscan name. It also provides site design, installation, training, and technical support services; and turnkey security screening solutions under the S2 name. The Healthcare segment offers patient monitoring, cardiology and remote monitoring, and connected care systems and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, physicians' offices, medical clinics, and ambulatory surgery centers. The Optoelectronics and Manufacturing segment provides optoelectronic devices under the OSI Optoelectronics, OSI LaserDiode, OSI Laserscan, and Advanced Photonix names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications under the OSI Electronics, APlus Products, Altaflex, and PFC Flexible Circuits names; LCD displays for medical, industrial, and consumer electronics applications; and flex circuits for OEM customers. This segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was incorporated in 1987 and is headquartered in Hawthorne, California.

About Universal Display

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications in the United States and internationally. The company offers PHOLED technologies and materials for displays and lighting products under the UniversalPHOLED brand. It is also involved in the research, development, and commercialization of other OLED device and manufacturing technologies, including FOLED that are flexible OLEDs for the fabrication of OLEDs on flexible substrates; and OVJP, an organic vapor jet printing technology. In addition, the company provides technology development and support services, including third-party collaboration and support to third parties for the commercialization of their OLED products; and contract research services in the areas of chemical synthesis research, development, and commercialization for non-OLED applications, as well as engages in the intellectual property and technology licensing activities. Universal Display Corporation was founded in 1985 and is headquartered in Ewing, New Jersey.