Comparing Celestica (CLS) and ON Semiconductor (ON)

Celestica (NYSE: CLS) and ON Semiconductor (NASDAQ:ON) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Insider & Institutional Ownership

71.0% of Celestica shares are owned by institutional investors. Comparatively, 98.0% of ON Semiconductor shares are owned by institutional investors. 1.0% of Celestica shares are owned by insiders. Comparatively, 1.4% of ON Semiconductor shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Celestica and ON Semiconductor’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Celestica $6.11 billion 0.22 $105.00 million $0.72 14.85
ON Semiconductor $5.54 billion 1.80 $810.70 million $1.88 12.53

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Celestica and ON Semiconductor, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Celestica 0 8 3 0 2.27
ON Semiconductor 1 7 11 0 2.53

Celestica currently has a consensus target price of $13.36, indicating a potential upside of 25.00%. ON Semiconductor has a consensus target price of $23.76, indicating a potential upside of 0.87%. Given Celestica’s higher probable upside, analysts plainly believe Celestica is more favorable than ON Semiconductor.

Volatility and Risk

Celestica has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, ON Semiconductor has a beta of 2.08, indicating that its share price is 108% more volatile than the S&P 500.

Profitability

This table compares Celestica and ON Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Celestica 1.72% 8.84% 4.08%
ON Semiconductor 14.63% 23.64% 7.39%

Summary

ON Semiconductor beats Celestica on 11 of the 14 factors compared between the two stocks.

About Celestica

Celestica Inc. is a provider of supply chain solutions. The Company operates in electronics manufacturing services business segment. The Company offers a range of services to its customers, including design and development, engineering services, supply chain management, new product introduction, component sourcing, electronics manufacturing, assembly and test, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics and after-market repair and return services. Its products and services serve a range of applications, including servers; storage systems; optical equipment; aerospace and defense electronics; healthcare products and applications; semiconductor equipment, and a range of industrial and alternative energy products, including solar panels and inverters. It designs, manufactures and tests solar panels for the residential, commercial and utility scale markets. It uses technologies in the assembly and testing of its products.

About ON Semiconductor

ON Semiconductor Corporation offers a portfolio of sensors, power management, connectivity, custom and system on chip (SoC), analog, logic, timing, and discrete devices. The Company’s segments include Power Solutions Group, Analog Solutions Group and Image Sensor Group. The Power Solutions Group offers a range of discrete, module and integrated semiconductor products. The Analog Solutions Group designs and develops analog, mixed-signal and logic application specific integrated circuits (ASICs) and application specific standard products (ASSPs), and power solutions. The Image Sensor Group designs and develops complementary metal oxide semiconductor (CMOS) and charge-coupled device (CCD) image sensors, as well as proximity sensors, image signal processors, and actuator drivers for autofocus and image stabilization for various end users in the automotive, industrial, consumer, wireless, medical, and aerospace/defense markets.

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