Tower Semiconductor (NASDAQ:TSEM) versus POET Technologies (NASDAQ:POET) Critical Analysis

POET Technologies (NASDAQ:POET) and Tower Semiconductor (NASDAQ:TSEM) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Profitability

This table compares POET Technologies and Tower Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
POET Technologies	N/A	-194.16%	-132.32%
Tower Semiconductor	14.75%	8.22%	6.91%

Volatility & Risk

POET Technologies has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Tower Semiconductor has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Institutional & Insider Ownership

2.0% of POET Technologies shares are owned by institutional investors. Comparatively, 70.5% of Tower Semiconductor shares are owned by institutional investors. 0.5% of POET Technologies shares are owned by company insiders. Comparatively, 1.0% of Tower Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for POET Technologies and Tower Semiconductor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
POET Technologies	0	0	2	1	3.33
Tower Semiconductor	0	0	3	0	3.00

POET Technologies presently has a consensus target price of $6.25, suggesting a potential upside of 5.04%. Tower Semiconductor has a consensus target price of $58.33, suggesting a potential upside of 13.25%. Given Tower Semiconductor’s higher possible upside, analysts plainly believe Tower Semiconductor is more favorable than POET Technologies.

Valuation and Earnings

This table compares POET Technologies and Tower Semiconductor”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
POET Technologies	$119,946.00	3,794.19	-$20.27 million	($0.59)	-10.08
Tower Semiconductor	$1.40 billion	4.08	$518.49 million	$1.85	27.84

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

Summary

Tower Semiconductor beats POET Technologies on 12 of the 15 factors compared between the two stocks.

About POET Technologies

POET Technologies Inc. designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. It offers integration solutions based on the POET Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques. It also develops photonic integrated components. The company serves the data center, telecommunications, Internet of things and industrial sensing, automotive LIDAR, optical coherence tomography for medical devices, and virtual reality systems markets. The company was formerly known as Opel Technologies Inc. and changed its name to POET Technologies Inc. in June 2013. POET Technologies Inc. was incorporated in 1972 and is headquartered in Toronto, Canada.

About Tower Semiconductor

Tower Semiconductor Ltd., an independent semiconductor foundry, focus on specialty process technologies to manufacture analog intensive mixed-signal semiconductor devices in Israel, the United States, Japan, Europe, and internationally. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The Company also provides design enablement platform for quick and accurate design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.