Contrasting Semtech (NASDAQ:SMTC) and Camtek (NASDAQ:CAMT)

Camtek (NASDAQ:CAMT) and Semtech (NASDAQ:SMTC) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Camtek and Semtech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Camtek	7.40%	21.58%	10.89%
Semtech	13.11%	21.74%	8.98%

Earnings and Valuation

This table compares Camtek and Semtech”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Camtek	$496.07 million	13.56	$50.72 million	$0.64	225.33
Semtech	$1.17 billion	14.16	-$40.38 million	$1.51	118.01

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

Insider & Institutional Ownership

41.9% of Camtek shares are owned by institutional investors. 79.4% of Camtek shares are owned by company insiders. Comparatively, 0.4% of Semtech shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Camtek and Semtech, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Camtek	0	7	7	0	2.50
Semtech	0	4	15	0	2.79

Camtek presently has a consensus target price of $173.25, suggesting a potential upside of 20.14%. Semtech has a consensus target price of $204.71, suggesting a potential upside of 14.88%. Given Camtek’s higher possible upside, research analysts clearly believe Camtek is more favorable than Semtech.

Volatility & Risk

Camtek has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Semtech has a beta of 2.35, suggesting that its stock price is 135% more volatile than the S&P 500.

Summary

Semtech beats Camtek on 8 of the 14 factors compared between the two stocks.

About Camtek

Camtek Ltd., together with its subsidiaries, develops, manufactures, and sells inspection and metrology equipment for semiconductor industry. The company provides Eagle-i, a system that delivers 2D inspection and metrology capabilities; Eagle-AP, which addresses the advanced packaging market using software and hardware technologies that deliver superior 2D and 3D inspection and metrology capabilities on the same platform; and Golden Eagle, a panel inspection and metrology system to address the challenges fanout wafer level packaging applications. It also develops automatic defect classification, which provides automatic defect classification of color images utilizing deep learning techniques to reduce and eliminate manual verification. In addition, the company offers MicroProf AP, a wafer metrology tool for applications at 3D packaging process steps; MicroProf DI, an optical inspection tool that enables inspection of structured and unstructured wafers for manufacturing process; MicroProf FE, a 2D/3D wafer metrology tool that serve front end HVM fab; MicroProf FS, an wafer metrology tool configurable for wafer foundry; MicroProf PT for hybrid metrology applications to common panel sizes; MicroProf MHU metrology tool, a material handling unit for semiconductor, MEMS, sapphire, and LED industries; MicroProf TL, an optical surface measurement tool for fully automatic 3D surface measurements; MicroProf 100, a universal surface metrology tool for determination of topography and film and sample thickness; MicroProf 200, a measuring device for contactless and non-destructive characterization of surfaces and films; and MicroProf 300, a SurfaceSens technology for quality assurance, development, and manufacturing. It serves semiconductor manufacturers, outsourced semiconductor assembly and test, integrated device manufacturers, and wafer level packaging subcontractors. Camtek Ltd. was incorporated in 1987 and is headquartered in Migdal Haemek, Israel.

About Semtech

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor and advanced algorithms. It provides signal integrity products, including a portfolio of optical data communications and video transport products used in various infrastructure, and industrial applications; a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications. The company offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products. In addition, it provides switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging related products. Further, it offers portfolio of IoT solutions, such as modules, gateways, routers, and connected services; and portfolio of connected services, including wireless connectivity and cloud-based services for industrial, medical and communications applications. The company serves original equipment manufacturers and industrial end-markets. It sells its products directly, as well as through independent sales representative firms and independent distributors in Asia- Pacific, North America, and Europe. Semtech Corporation was incorporated in 1960 and is headquartered in Camarillo, California.