Comparing DAQO New Energy (NYSE:DQ) & Tower Semiconductor (NASDAQ:TSEM)

Tower Semiconductor (NASDAQ:TSEM) and DAQO New Energy (NYSE:DQ) are both technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Profitability

This table compares Tower Semiconductor and DAQO New Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tower Semiconductor	19.36%	11.72%	9.62%
DAQO New Energy	-45.46%	-3.90%	-3.58%

Institutional & Insider Ownership

70.5% of Tower Semiconductor shares are owned by institutional investors. Comparatively, 47.2% of DAQO New Energy shares are owned by institutional investors. 1.0% of Tower Semiconductor shares are owned by insiders. Comparatively, 24.3% of DAQO New Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Tower Semiconductor and DAQO New Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tower Semiconductor	0	2	7	1	2.90
DAQO New Energy	3	1	1	0	1.60

Tower Semiconductor currently has a consensus price target of $297.12, indicating a potential upside of 120.64%. DAQO New Energy has a consensus price target of $13.73, indicating a potential upside of 9.45%. Given Tower Semiconductor’s stronger consensus rating and higher possible upside, equities analysts plainly believe Tower Semiconductor is more favorable than DAQO New Energy.

Earnings and Valuation

This table compares Tower Semiconductor and DAQO New Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tower Semiconductor	$1.57 billion	9.67	$220.47 million	$3.11	43.30
DAQO New Energy	$505.24 million	1.68	-$170.51 million	($3.40)	-3.69

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

Risk & Volatility

Tower Semiconductor has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, DAQO New Energy has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Summary

Tower Semiconductor beats DAQO New Energy on 14 of the 15 factors compared between the two stocks.

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.

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.