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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Diodes and AXT, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diodes 0 0 4 0 3.00
AXT 0 0 3 0 3.00

Diodes currently has a consensus price target of $38.00, suggesting a potential upside of 10.47%. AXT has a consensus price target of $8.50, suggesting a potential upside of 48.34%. Given AXT’s higher probable upside, analysts clearly believe AXT is more favorable than Diodes.

Profitability

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

Net Margins Return on Equity Return on Assets
Diodes 3.75% 11.99% 7.48%
AXT 13.00% 7.34% 6.42%

Institutional & Insider Ownership

76.0% of Diodes shares are held by institutional investors. Comparatively, 55.8% of AXT shares are held by institutional investors. 6.7% of Diodes shares are held by company insiders. Comparatively, 6.9% of AXT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Diodes has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, AXT has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.

Valuation & Earnings

This table compares Diodes and AXT’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diodes $1.05 billion 1.63 -$1.80 million $1.37 25.11
AXT $98.67 million 2.30 $10.14 million $0.26 22.04

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

Summary

AXT beats Diodes on 7 of the 13 factors compared between the two stocks.

Diodes Company Profile

Diodes Incorporated, together with its subsidiaries, designs, manufactures, and supplies application-specific standard products in the discrete, logic, and analog and mixed semiconductor markets in Asia, North America, Europe, and internationally. It primarily focuses on low pin count semiconductor devices with one or more active or passive components. The company offers discrete semiconductor products, such as performance Schottky rectifiers and diodes; Zener diodes, including tight tolerance and low operating current type performance Zener diodes; standard, fast, super-fast, and ultra-fast recovery rectifiers; bridge rectifiers; switching diodes; small signal bipolar and pre-biased transistors; MOSFETs; thyristor surge protection devices; and transient voltage suppressors. It also provides analog products comprising power management devices consisting of AC-DC and DC-DC converters, USB power switches, and low dropout and linear voltage regulators; linear devices, such as operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, including hall-effect sensors and motor drivers. In addition, the company offers standard logic products comprising low-voltage complementary metal?oxide?semiconductor (CMOS) and high-speed CMOS devices; ultra-low power CMOS logic products and analog switches; multichip products and co-packaged discrete, analog, and mixed-signal silicon in miniature packages; silicon and silicon epitaxial wafers; and crystals and oscillators. It sells its products to the consumer electronics, computing, communications, industrial, and automotive markets through direct sales and marketing personnel, independent sales representatives, and distributors. Diodes Incorporated was founded in 1959 and is headquartered in Plano, Texas.

AXT Company Profile

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. It manufactures semiconductor substrates using its proprietary vertical gradient freeze technology. The company offers indium phosphide (InP) for use in fiber optic lasers and detectors, passive optical networks, data center connectivity, silicon photonics, photonic integrated circuits, terrestrial solar cells, lasers, military wireless RF amplifiers, infrared motion control, and infrared thermal imaging products. It also provides semi-insulating gallium with arsenic (GaAs) substrates, which are used for application in power amplifiers for wireless devices, and transistors and solar cells for drones. In addition, the company offers semi-conducting GaAs substrates that are used in opto-electronic products, including high brightness light emitting diodes in backlight wireless handsets and liquid crystal display televisions, as well as for automotive panel, signage, display, and lighting applications; and 3-D sensing using vertical cavity surface emitting lasers. Further, it provides germanium (Ge) substrates for space and terrestrial photovoltaic applications, as well as optical applications. Additionally, the company, through its subsidiaries and joint ventures, manufactures and sells raw materials, such as gallium, gallium alloys, InP poly-crystal, arsenic, Ge, Ge dioxide, high purity arsenic, pyrolytic boron nitride crucibles, and boron oxide. It sells its products through direct sales force in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was founded in 1986 and is headquartered in Fremont, California.

Receive News & Ratings for Diodes Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Diodes and related companies with MarketBeat.com's FREE daily email newsletter.