Head-To-Head Contrast: Ultra Clean (NASDAQ:UCTT) vs. Disco (OTCMKTS:DSCSY)

Ultra Clean (NASDAQ:UCTT) and Disco (OTCMKTS:DSCSY) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Valuation and Earnings

This table compares Ultra Clean and Disco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ultra Clean	$2.05 billion	1.22	-$181.20 million	($0.52)	-107.37
Disco	$2.90 billion	12.92	$894.45 million	$0.87	39.71

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

Analyst Ratings

This is a breakdown of current recommendations for Ultra Clean and Disco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ultra Clean	1	1	6	0	2.62
Disco	0	0	1	1	3.50

Ultra Clean currently has a consensus target price of $128.17, indicating a potential upside of 129.57%. Given Ultra Clean’s higher probable upside, analysts clearly believe Ultra Clean is more favorable than Disco.

Profitability

This table compares Ultra Clean and Disco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ultra Clean	-1.07%	6.99%	2.89%
Disco	31.65%	26.03%	20.56%

Institutional & Insider Ownership

96.1% of Ultra Clean shares are held by institutional investors. Comparatively, 0.0% of Disco shares are held by institutional investors. 1.8% of Ultra Clean shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Ultra Clean has a beta of 1.86, indicating that its stock price is 86% more volatile than the S&P 500. Comparatively, Disco has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500.

Summary

Disco beats Ultra Clean on 9 of the 15 factors compared between the two stocks.

About Ultra Clean

Ultra Clean Holdings, Inc. develops and supplies critical subsystems, components and parts, and ultra-high purity cleaning and analytical services for the semiconductor industry in the United States and internationally. The company provides ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, and gas line and component heaters; chemical delivery modules that deliver gases and reactive chemicals in a liquid or gaseous form from a centralized subsystem to the reaction chamber; and gas delivery systems, such as weldments, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system. It also offers various industrial and automation production equipment; fluid delivery systems consist of one or more chemical delivery units, including PFA tubing, filters, flow controllers, regulators, component heaters, and an integrated electronic and/or pneumatic control system; precision robotic systems; top-plate assemblies; frame assemblies; process modules, a subsystem of semiconductor manufacturing tools that process integrated circuits onto wafers; and other high-level assemblies. In addition, the company provides tool chamber parts cleaning and coating services; micro-contamination analysis services for tool parts, wafers and depositions, chemicals, cleanroom materials, deionized water, and airborne molecular contamination; and analytical verification services for process tool chamber part cleaning. It primarily serves original equipment manufacturing customers in the semiconductor capital equipment and semiconductor integrated device manufacturing industries, as well as display, consumer, medical, energy, industrial, and research equipment industries. The company was founded in 1991 and is headquartered in Hayward, California.

About Disco

Disco Corporation manufactures and sells precision cutting, grinding, and polishing machines in Japan and internationally. Its precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws. The company also offers precision processing tools, such as dicing blades, grinding wheels, and dry polishing wheels; and other products, such as accessory equipment. In addition, it is involved in the disassembly and recycling of precision cutting, grinding, and polishing machines, as well as provides training services for the maintenance and operation of its products. Further, the company leases precision machines; and purchases and sells used machines. Additionally, it manufactures precision diamond abrasive tools, as well as offers chargeable processing services. The company was founded in 1937 and is headquartered in Tokyo, Japan.