Allegro MicroSystems (NASDAQ:ALGM – Get Free Report) and DAQO New Energy (NYSE:DQ – Get Free Report) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.
Volatility and Risk
Allegro MicroSystems has a beta of 1.91, meaning that its share price is 91% more volatile than the S&P 500. Comparatively, DAQO New Energy has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings for Allegro MicroSystems and DAQO New Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Allegro MicroSystems | 1 | 1 | 9 | 1 | 2.83 |
| DAQO New Energy | 4 | 1 | 1 | 0 | 1.50 |
Earnings and Valuation
This table compares Allegro MicroSystems and DAQO New Energy”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Allegro MicroSystems | $890.10 million | 7.36 | -$14.90 million | $0.06 | 585.50 |
| DAQO New Energy | $665.41 million | 1.17 | -$170.51 million | ($2.84) | -4.04 |
Allegro MicroSystems has higher revenue and earnings than DAQO New Energy. DAQO New Energy is trading at a lower price-to-earnings ratio than Allegro MicroSystems, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
56.5% of Allegro MicroSystems shares are owned by institutional investors. Comparatively, 47.2% of DAQO New Energy shares are owned by institutional investors. 0.5% of Allegro MicroSystems shares are owned by company insiders. Comparatively, 24.3% of DAQO New Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Allegro MicroSystems and DAQO New Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Allegro MicroSystems | 1.50% | 8.30% | 5.65% |
| DAQO New Energy | -34.50% | -3.26% | -3.01% |
Summary
Allegro MicroSystems beats DAQO New Energy on 14 of the 15 factors compared between the two stocks.
About Allegro MicroSystems
Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.
About DAQO New Energy
Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.
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