Head-To-Head Contrast: FormFactor (NASDAQ:FORM) & Diodes (NASDAQ:DIOD)

FormFactor (NASDAQ:FORM) and Diodes (NASDAQ:DIOD) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for FormFactor and Diodes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FormFactor	0	5	3	0	2.38
Diodes	0	2	1	0	2.33

FormFactor presently has a consensus target price of $48.50, suggesting a potential upside of 37.08%. Diodes has a consensus target price of $63.33, suggesting a potential upside of 12.86%. Given FormFactor’s stronger consensus rating and higher probable upside, research analysts clearly believe FormFactor is more favorable than Diodes.

Institutional & Insider Ownership

98.8% of FormFactor shares are held by institutional investors. Comparatively, 99.2% of Diodes shares are held by institutional investors. 1.0% of FormFactor shares are held by company insiders. Comparatively, 2.3% of Diodes shares are held by company 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.

Volatility and Risk

FormFactor has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Diodes has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500.

Profitability

This table compares FormFactor and Diodes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FormFactor	9.12%	5.93%	4.89%
Diodes	3.36%	3.28%	2.57%

Valuation & Earnings

This table compares FormFactor and Diodes”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FormFactor	$763.60 million	3.59	$69.61 million	$0.89	39.75
Diodes	$1.31 billion	1.98	$44.02 million	$0.95	59.07

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

Summary

FormFactor beats Diodes on 8 of the 14 factors compared between the two stocks.

About FormFactor

FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to semiconductor companies and scientific institutions in the United States, Taiwan, South Korea, China, Europe, Japan, Malaysia, Singapore, and internationally. It operates in two segments, Probe Cards and Systems. The company offers probe cards to test various semiconductor device types, including systems on a chip products, mobile application processors, microprocessors, microcontrollers, and graphic processors, as well as radio frequency, analog, mixed signal, image sensor, electro-optical, dynamic random access memory, NAND flash memory, and NOR flash memory devices, as well as computer processor devices; and analytical probes, which are used for a range of applications, including device characterization, electrical simulation model development, failure analysis, and prototype design debugging for universities, research institutions, semiconductor integrated device manufacturers, semiconductor foundries, and fabless semiconductor companies. It also provides probe systems for semiconductor design engineers to capture and analyze accurate data; surface metrology systems for the development, production, and quality control of semiconductor products; thermal subsystems, such as thermal chucks and other test systems used in probe stations and other applications; and precision cryogenic instruments, semiconductor tests, and measurement systems. In addition, the company offers on-site probe card maintenance and service training, seminars, and telephone support services. It markets and sells its products through direct sales force, manufacturers' representatives, and distributors. The company was incorporated in 1993 and is headquartered in Livermore, California.

About Diodes

Diodes Incorporated, together with its subsidiaries, manufactures and supplies application-specific standard products in the broad discrete, logic, analog, and mixed-signal semiconductor markets worldwide. The company offers discrete semiconductor products, such as MOSFETs, SiC MOSFETs; data line protection, power line protection, thyristers, USB Type-C protection, and transient voltage suppressors; Schottky, small signal switching, Zener, and SiC diodes; bridges, super barrier, Schottky, Schottky bridge, and fast/ultra-fast rectifiers; and bipolar, avalanche, gate driver, and pre-bias transistors. It also provides analog products, including power management devices comprising AC-DC and DC-DC converters, USB power switches, low dropout, photocoupler and linear voltage regulators; standard linear devices consisting of operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, such as hall-effect sensors and motor drivers. In addition, the company offers mixed-signal products, such as high speed mux/demux, digital switches, interface, redrivers, universal level shifters/voltage translators, clock ICs and packet switches; standard logic products comprising low-voltage complementary metal-oxide-semiconductor (CMOS) and advanced high-speed CMOS devices; ultra-low power CMOS logic; and analog switches; multichip products and co-packaged discrete, analog and mixed-signal silicon in miniature packages; and silicon and silicon epitaxial wafers used in manufacturing frequency control products and contact images sensors. It serves the industrial, automotive, computing, communications, and consumer markets through direct sales, marketing personnel, independent sales representatives, and distributors. The company was incorporated in 1959 and is headquartered in Plano, Texas.