Critical Analysis: Nova Measuring Instruments (NVMI) vs. Universal Display (OLED)

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Nova Measuring Instruments (NASDAQ:NVMI) and Universal Display (NASDAQ:OLED) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.

Volatility & Risk

Nova Measuring Instruments has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Universal Display has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Dividends

Universal Display pays an annual dividend of $0.40 per share and has a dividend yield of 0.2%. Nova Measuring Instruments does not pay a dividend. Universal Display pays out 32.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Nova Measuring Instruments and Universal Display, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nova Measuring Instruments 0 0 3 0 3.00
Universal Display 0 1 8 0 2.89

Nova Measuring Instruments presently has a consensus target price of $34.00, indicating a potential upside of 34.33%. Universal Display has a consensus target price of $146.00, indicating a potential downside of 9.66%. Given Nova Measuring Instruments’ stronger consensus rating and higher possible upside, equities analysts clearly believe Nova Measuring Instruments is more favorable than Universal Display.

Valuation and Earnings

This table compares Nova Measuring Instruments and Universal Display’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nova Measuring Instruments $251.13 million 2.81 $54.38 million $1.96 12.91
Universal Display $247.41 million 30.77 $58.84 million $1.24 130.34

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

Profitability

This table compares Nova Measuring Instruments and Universal Display’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nova Measuring Instruments 21.65% 21.64% 18.13%
Universal Display 23.78% 8.85% 6.83%

Institutional & Insider Ownership

48.4% of Nova Measuring Instruments shares are owned by institutional investors. Comparatively, 83.7% of Universal Display shares are owned by institutional investors. 1.0% of Nova Measuring Instruments shares are owned by insiders. Comparatively, 4.0% of Universal Display shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Universal Display beats Nova Measuring Instruments on 9 of the 16 factors compared between the two stocks.

Nova Measuring Instruments Company Profile

Nova Measuring Instruments Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel. The company offers in-line optical and x-ray stand-alone metrology systems, as well as integrated optical metrology systems that attach directly to wafer fabrication process equipment. Its products include thin film and optical CD process control solutions for dimensional, films, and material metrology measurements for process control across various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical polishing, and deposition. The company serves various sectors of the integrated circuit manufacturing industry, including logic, ASIC, foundries, and memory manufactures, as well as end users and process equipment manufacturers worldwide. Nova Measuring Instruments Ltd. was founded in 1993 and is headquartered in Rehovot, Israel.

Universal Display Company Profile

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel displays and solid-state lighting applications. As of February 21, 2019, it owned or had exclusive and co-exclusive licenses, or had sole license rights with respect to approximately 5,000 issued and pending patents worldwide. The company licenses and supplies its proprietary UniversalPHOLED materials to display and lighting manufacturers, and others. 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; encapsulation technology for the packaging of flexible OLEDs and other thin-film devices, as well as for use as a barrier film for plastic substrates; UniversalP2OLED, which are printable phosphorescent OLEDs; OVJP, an organic vapor jet printing technology; OVPD, an organic vapor phase deposition process for manufacturing a small molecule OLED; and TOLED, which are transparent OLEDs for the fabrication of OLEDs that have transparent cathodes. In addition, the company provides technology development and support services, including government contract work and support provided to third parties for the commercialization of their OLED products. Universal Display Corporation has strategic relationships with Samsung Display Co., Ltd.; LG Display Co., Ltd.; BOE Technology Group Co., Ltd.; Tianma Micro-electronics Co., Ltd.; AU Optronics Corporation; EverDisplay Optronics (Shanghai) Limited; Konica Minolta Holdings Inc.; Sumitomo Chemical Company, Ltd.; OLEDWorks GmbH; and Kaneka Corporation. The company was founded in 1985 and is headquartered in Ewing, New Jersey.

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