Critical Analysis: Universal Electronics (NASDAQ:UEIC) & MKS (NASDAQ:MKSI)

Universal Electronics (NASDAQ:UEIC) and MKS (NASDAQ:MKSI) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Institutional and Insider Ownership

79.4% of Universal Electronics shares are owned by institutional investors. Comparatively, 99.8% of MKS shares are owned by institutional investors. 9.4% of Universal Electronics shares are owned by company insiders. Comparatively, 0.5% of MKS shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Universal Electronics and MKS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Electronics	1	2	0	0	1.67
MKS	1	3	10	0	2.64

Universal Electronics presently has a consensus price target of $5.75, suggesting a potential upside of 43.39%. MKS has a consensus price target of $227.75, suggesting a potential upside of 4.92%. Given Universal Electronics’ higher probable upside, analysts plainly believe Universal Electronics is more favorable than MKS.

Volatility and Risk

Universal Electronics has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, MKS has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Universal Electronics	-5.64%	-0.68%	-0.33%
MKS	7.25%	20.80%	5.88%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Electronics	$394.88 million	0.14	-$24.03 million	($1.67)	-2.40
MKS	$3.59 billion	4.07	$190.00 million	$4.12	52.68

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

Summary

MKS beats Universal Electronics on 12 of the 14 factors compared between the two stocks.

About Universal Electronics

Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.

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.