Critical Survey: Nikon (OTCMKTS:NINOY) & Ultra Clean (NASDAQ:UCTT)

Nikon (OTCMKTS:NINOY) and Ultra Clean (NASDAQ:UCTT) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Nikon and Ultra Clean”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nikon	$4.70 billion	0.70	$40.41 million	$0.26	37.71
Ultra Clean	$2.10 billion	0.50	$23.70 million	($3.38)	-6.81

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Nikon and Ultra Clean, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nikon	0	0	0	0	0.00
Ultra Clean	0	0	3	0	3.00

Ultra Clean has a consensus target price of $30.6667, suggesting a potential upside of 33.16%. Given Ultra Clean’s stronger consensus rating and higher possible upside, analysts clearly believe Ultra Clean is more favorable than Nikon.

Risk & Volatility

Nikon has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Ultra Clean has a beta of 1.99, suggesting that its share price is 99% more volatile than the S&P 500.

Profitability

This table compares Nikon and Ultra Clean’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nikon	1.85%	2.00%	1.17%
Ultra Clean	-7.15%	5.32%	2.54%

Insider and Institutional Ownership

0.1% of Nikon shares are owned by institutional investors. Comparatively, 96.1% of Ultra Clean shares are owned by institutional investors. 1.9% of Ultra Clean shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Ultra Clean beats Nikon on 8 of the 14 factors compared between the two stocks.

About Nikon

Nikon Corporation manufactures and sells optical instruments in Japan, North America, Europe, China, Thailand, and internationally. It operates through Imaging Products Business, Precision Equipment Business, Healthcare Business, Components Business, and Industrial equipment and Others segments. The Imaging Products Business segment provides digital SLR cameras, compact digital cameras, and interchangeable camera lenses. The Precision Equipment Business segment offers FPD lithography systems and semiconductor lithography systems. The Healthcare Business segment provides biological microscopes, cell culture observation systems, and ultra-wide field retinal imaging devices, as well as products and services related to the contract cell development and manufacturing field. The Components Business segment offers optical components, optical parts, encoders, and material processing products and services; EUV-related components and space-related solutions; and photomask substrates for FPDs. The Industrial equipment and Others segment provides industrial microscopes, non-contact 3D metrology systems, measuring instruments, X-ray/CT inspection systems, and surveying instruments. In addition, it sells used equipment; provides maintenance services for FPD/semiconductor lithography systems; sells and services cameras, microscopes, measuring instruments, and X-ray inspection equipment; and develops and supports computer software. Further, the company is involved in the procurement, logistics, and welfare activities; development, manufacturing, and testing services for eyeglass and lenses; and assembly of camera units. Nikon Corporation was incorporated in 1917 and is headquartered in Minato, Japan.

About Ultra Clean

Ultra Clean Holdings, Inc. develops and supplies critical subsystems, components and parts, and ultra-high purity cleaning and analytical services for the semiconductor industry in the United States and internationally. The company provides ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, and gas line and component heaters; chemical delivery modules that deliver gases and reactive chemicals in a liquid or gaseous form from a centralized subsystem to the reaction chamber; and gas delivery systems, such as weldments, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system. It also offers various industrial and automation production equipment; fluid delivery systems consist of one or more chemical delivery units, including PFA tubing, filters, flow controllers, regulators, component heaters, and an integrated electronic and/or pneumatic control system; precision robotic systems; top-plate assemblies; frame assemblies; process modules, a subsystem of semiconductor manufacturing tools that process integrated circuits onto wafers; and other high-level assemblies. In addition, the company provides tool chamber parts cleaning and coating services; micro-contamination analysis services for tool parts, wafers and depositions, chemicals, cleanroom materials, deionized water, and airborne molecular contamination; and analytical verification services for process tool chamber part cleaning. It primarily serves original equipment manufacturing customers in the semiconductor capital equipment and semiconductor integrated device manufacturing industries, as well as display, consumer, medical, energy, industrial, and research equipment industries. The company was founded in 1991 and is headquartered in Hayward, California.