Critical Survey: MKS (NASDAQ:MKSI) versus POET Technologies (NASDAQ:POET)

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

Insider and Institutional Ownership

2.0% of POET Technologies shares are held by institutional investors. Comparatively, 99.8% of MKS shares are held by institutional investors. 0.5% of POET Technologies shares are held by insiders. Comparatively, 0.6% of MKS shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares POET Technologies and MKS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
POET Technologies	-4,423.13%	-11.65%	-10.12%
MKS	10.15%	24.72%	7.80%

Analyst Ratings

This is a summary of recent recommendations for POET Technologies and MKS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
POET Technologies	1	0	0	0	1.00
MKS	1	2	12	1	2.81

POET Technologies currently has a consensus price target of $8.00, indicating a potential upside of 53.85%. MKS has a consensus price target of $374.86, indicating a potential upside of 85.54%. Given MKS’s stronger consensus rating and higher probable upside, analysts plainly believe MKS is more favorable than POET Technologies.

Volatility & Risk

POET Technologies has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, MKS has a beta of 2.03, suggesting that its stock price is 103% more volatile than the S&P 500.

Valuation and Earnings

This table compares POET Technologies and MKS”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
POET Technologies	$1.71 million	466.13	-$62.96 million	($0.58)	-8.97
MKS	$4.35 billion	3.14	$295.00 million	$6.27	32.22

MKS has higher revenue and earnings than POET Technologies. POET Technologies 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 POET Technologies on 14 of the 15 factors compared between the two stocks.

About POET Technologies

POET Technologies Inc. designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. It offers integration solutions based on the POET Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques. It also develops photonic integrated components. The company serves the data center, telecommunications, Internet of things and industrial sensing, automotive LIDAR, optical coherence tomography for medical devices, and virtual reality systems markets. The company was formerly known as Opel Technologies Inc. and changed its name to POET Technologies Inc. in June 2013. POET Technologies Inc. was incorporated in 1972 and is headquartered in Toronto, Canada.

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.