Sono-Tek (NASDAQ:SOTK – Get Free Report) and Broadcom (NASDAQ:AVGO – Get Free Report) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.
Risk and Volatility
Sono-Tek has a beta of -0.27, suggesting that its share price is 127% less volatile than the S&P 500. Comparatively, Broadcom has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.
Profitability
This table compares Sono-Tek and Broadcom’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sono-Tek | 7.33% | 8.38% | 6.41% |
| Broadcom | 36.20% | 37.45% | 16.51% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sono-Tek | 0 | 4 | 0 | 0 | 2.00 |
| Broadcom | 0 | 1 | 29 | 3 | 3.06 |
Sono-Tek currently has a consensus price target of $7.50, suggesting a potential upside of 84.73%. Broadcom has a consensus price target of $436.33, suggesting a potential upside of 23.91%. Given Sono-Tek’s higher possible upside, research analysts plainly believe Sono-Tek is more favorable than Broadcom.
Institutional & Insider Ownership
47.9% of Sono-Tek shares are held by institutional investors. Comparatively, 76.4% of Broadcom shares are held by institutional investors. 5.5% of Sono-Tek shares are held by company insiders. Comparatively, 2.0% of Broadcom shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Sono-Tek and Broadcom”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sono-Tek | $20.61 million | 3.09 | $1.27 million | $0.10 | 40.60 |
| Broadcom | $63.89 billion | 26.13 | $23.13 billion | $4.76 | 73.98 |
Broadcom has higher revenue and earnings than Sono-Tek. Sono-Tek is trading at a lower price-to-earnings ratio than Broadcom, indicating that it is currently the more affordable of the two stocks.
Summary
Broadcom beats Sono-Tek on 13 of the 15 factors compared between the two stocks.
About Sono-Tek
Sono-Tek Corporation designs and manufactures ultrasonic coating systems for applying on parts and components for the microelectronics/electronics, alternative energy, medical, industrial, and research and development/other markets worldwide. The company also designs and manufactures custom-engineered ultrasonic coating systems; and provides nozzles and generators for manufacturers' equipment. Its products include integrated multi-axis coating systems, integrated coating systems, fluxing systems, OEM systems, and other related systems. In addition, the company provides surface coating solutions and application consulting services. It markets and distributes its products through direct sales personnel, select independent distributors, and sales representatives. The company was incorporated in 1975 and is based in Milton, New York.
About Broadcom
Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices. The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.
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