ASML (NASDAQ:ASML – Get Free Report) and MKS (NASDAQ:MKSI – Get Free Report) are both large-cap technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.
Institutional and Insider Ownership
26.1% of ASML shares are owned by institutional investors. Comparatively, 99.8% of MKS shares are owned by institutional investors. 0.6% of MKS shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Dividends
ASML pays an annual dividend of $7.13 per share and has a dividend yield of 0.5%. MKS pays an annual dividend of $1.00 per share and has a dividend yield of 0.5%. ASML pays out 17.6% of its earnings in the form of a dividend. MKS pays out 11.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. MKS is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for ASML and MKS, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ASML | 3 | 2 | 17 | 2 | 2.75 |
| MKS | 1 | 2 | 11 | 1 | 2.80 |
ASML currently has a consensus target price of $2,204.71, suggesting a potential upside of 54.74%. MKS has a consensus target price of $366.77, suggesting a potential upside of 90.76%. Given MKS’s stronger consensus rating and higher possible upside, analysts plainly believe MKS is more favorable than ASML.
Risk and Volatility
ASML has a beta of 1.8, suggesting that its share price is 80% more volatile than the S&P 500. Comparatively, MKS has a beta of 2.14, suggesting that its share price is 114% more volatile than the S&P 500.
Valuation and Earnings
This table compares ASML and MKS”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ASML | $36.95 billion | 14.86 | $10.87 billion | $40.62 | 35.08 |
| MKS | $3.93 billion | 3.31 | $295.00 million | $8.43 | 22.81 |
ASML has higher revenue and earnings than MKS. MKS is trading at a lower price-to-earnings ratio than ASML, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares ASML and MKS’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ASML | 34.10% | 64.24% | 26.08% |
| MKS | 12.64% | 28.77% | 9.51% |
Summary
ASML beats MKS on 10 of the 17 factors compared between the two stocks.
About ASML
ASML Holding N.V. develops, produces, markets, sells, and services advanced semiconductor equipment systems for chipmakers. It offers advanced semiconductor equipment systems, including lithography, metrology, and inspection systems. The company also provides extreme ultraviolet lithography systems; and deep ultraviolet lithography systems comprising immersion and dry lithography solutions to manufacture various range of semiconductor nodes and technologies. In addition, it offers metrology and inspection systems, including YieldStar optical metrology systems to assess the quality of patterns on the wafers; and HMI electron beam solutions to locate and analyze individual chip defects. Further, the company provides computational lithography solutions, and lithography systems and control software solutions; and refurbishes and upgrades lithography systems, as well as offers customer support and related services. It operates in Japan, South Korea, Singapore, Taiwan, China, rest of Asia, the Netherlands, rest of Europe, the Middle East, Africa, and the United States. The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.
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.
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