Financial Review: Photronics (NASDAQ:PLAB) and Broadcom (NASDAQ:AVGO)

Photronics (NASDAQ:PLAB) and Broadcom (NASDAQ:AVGO) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Earnings and Valuation

This table compares Photronics and Broadcom”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Photronics	$862.75 million	1.54	$130.69 million	$2.35	8.91
Broadcom	$54.53 billion	20.04	$5.90 billion	$2.08	111.74

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

Risk and Volatility

Photronics has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, Broadcom has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Profitability

This table compares Photronics and Broadcom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Photronics	15.07%	9.10%	7.80%
Broadcom	11.43%	28.00%	11.16%

Institutional and Insider Ownership

88.4% of Photronics shares are held by institutional investors. Comparatively, 76.4% of Broadcom shares are held by institutional investors. 3.2% of Photronics shares are held by insiders. Comparatively, 2.0% of Broadcom shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Photronics and Broadcom, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Photronics	0	0	1	0	3.00
Broadcom	0	2	25	1	2.96

Photronics presently has a consensus target price of $35.00, suggesting a potential upside of 67.22%. Broadcom has a consensus target price of $229.48, suggesting a potential downside of 1.26%. Given Photronics’ stronger consensus rating and higher probable upside, research analysts plainly believe Photronics is more favorable than Broadcom.

Summary

Broadcom beats Photronics on 8 of the 15 factors compared between the two stocks.

About Photronics

Photronics, Inc., together with its subsidiaries, engages in the manufacture and sale of photomask products and services in the United States, Taiwan, China, Korea, Europe, and internationally. It offers photomasks that are used in the manufacture of integrated circuits and flat panel displays (FPDs); and to transfer circuit patterns onto semiconductor wafers, and FDP substrates. The company offers electrical and optical components. It sells its products to semiconductor and FPD manufacturers, designers, and foundries, as well as to other high-performance electronics manufacturers through its sales personnel and customer service representatives. The company was formerly known as Photronic Labs, Inc. and changed its name to Photronics, Inc. in 1990. Photronics, Inc. was incorporated in 1969 and is based in Brookfield, Connecticut.

About Broadcom

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices. The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.