Resonant (NASDAQ: RESN) and Diodes (NASDAQ:DIOD) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Volatility and Risk

Resonant has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Diodes has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Resonant -3,119.05% -150.42% -126.22%
Diodes 2.68% 5.64% 3.07%

Valuation and Earnings

This table compares Resonant and Diodes’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Resonant $300,000.00 267.76 -$15.24 million ($1.48) -3.24
Diodes $942.16 million 1.80 $15.93 million $0.52 66.31

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

Institutional and Insider Ownership

5.1% of Resonant shares are held by institutional investors. Comparatively, 73.9% of Diodes shares are held by institutional investors. 22.3% of Resonant shares are held by insiders. Comparatively, 7.0% of Diodes shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Resonant and Diodes, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Resonant 0 0 3 0 3.00
Diodes 1 3 1 0 2.00

Resonant currently has a consensus price target of $8.00, indicating a potential upside of 67.01%. Diodes has a consensus price target of $34.50, indicating a potential upside of 0.06%. Given Resonant’s stronger consensus rating and higher probable upside, equities analysts plainly believe Resonant is more favorable than Diodes.

Summary

Diodes beats Resonant on 8 of the 13 factors compared between the two stocks.

Resonant Company Profile

Resonant Inc. is a late-stage development company. The Company creates filter designs for radio frequency (RF) front-ends for the mobile device industry. The RF front-end is the circuitry in a mobile device for analog signal processing and is located between the device’s antenna and its digital baseband. The Company uses a technology called Infinite Synthesized Networks (ISN) to configure and connect resonators, the building blocks of RF filters. The Company uses ISN to develop new classes of filter designs. The Company is also developing a series of single-band surface acoustic wave (SAW) filter designs for frequency bands. The Company is developing multiplexer filter designs for over two bands to address the carrier aggregation (CA) requirements of its customers. In addition, the Company is also developing reconfigurable filter designs to replace multiple filters for multiple bands. The Company is also involved in the development of a filter reconfigurable between three bands.

Diodes Company Profile

Diodes Incorporated is a manufacturer and supplier of application-specific standard products within the discrete, logic, analog and mixed-signal semiconductor markets, serving the consumer electronics, computing, communications, industrial and automotive markets. The Company’s products include diodes; rectifiers; transistors; metal-oxide semiconductor field-effect transistors (MOSFETs); protection devices; amplifiers and comparators; Hall-effect and temperature sensors, and power management devices, including light emitting diode (LED) drivers, alternating current (AC)-direct current (DC) and DC-DC switching, linear voltage regulators and voltage references, along with special function devices, such as universal serial bus (USB) power switches, load switches, voltage supervisors and motor controllers. It also holds interests in Pericom Semiconductor Corporation, which designs, develops and markets integrated circuits (ICs) and frequency control products (FCPs).

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