OSI Systems (NASDAQ:OSIS – Get Free Report) and Diodes (NASDAQ:DIOD – Get Free Report) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, valuation, analyst recommendations, institutional ownership and risk.
Risk and Volatility
OSI Systems has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Diodes has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and target prices for OSI Systems and Diodes, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| OSI Systems | 0 | 0 | 5 | 0 | 3.00 |
| Diodes | 0 | 3 | 2 | 0 | 2.40 |
Profitability
This table compares OSI Systems and Diodes’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| OSI Systems | 8.31% | 18.17% | 7.72% |
| Diodes | 4.72% | 3.90% | 3.04% |
Valuation and Earnings
This table compares OSI Systems and Diodes”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| OSI Systems | $1.54 billion | 1.73 | $128.15 million | $7.66 | 20.78 |
| Diodes | $1.29 billion | 1.99 | $227.18 million | $1.32 | 42.11 |
Diodes has lower revenue, but higher earnings than OSI Systems. OSI Systems is trading at a lower price-to-earnings ratio than Diodes, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
89.2% of OSI Systems shares are held by institutional investors. Comparatively, 99.2% of Diodes shares are held by institutional investors. 5.2% of OSI Systems shares are held by insiders. Comparatively, 2.3% of Diodes shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
OSI Systems beats Diodes on 8 of the 14 factors compared between the two stocks.
About OSI Systems
OSI Systems, Inc. designs and manufactures electronic systems and components. It operates in three segments: Security, Healthcare, and Optoelectronics and Manufacturing. The Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation monitoring, explosive and narcotics trace detection systems, and optical inspection systems under the Rapiscan name. It also provides site design, installation, training, and technical support services; and turnkey security screening solutions under the S2 name. The Healthcare segment offers patient monitoring, cardiology and remote monitoring, and connected care systems and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, physicians' offices, medical clinics, and ambulatory surgery centers. The Optoelectronics and Manufacturing segment provides optoelectronic devices under the OSI Optoelectronics, OSI LaserDiode, OSI Laserscan, and Advanced Photonix names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications under the OSI Electronics, APlus Products, Altaflex, and PFC Flexible Circuits names; LCD displays for medical, industrial, and consumer electronics applications; and flex circuits for OEM customers. This segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was incorporated in 1987 and is headquartered in Hawthorne, California.
About Diodes
Diodes Incorporated, together with its subsidiaries, manufactures and supplies application-specific standard products in the broad discrete, logic, analog, and mixed-signal semiconductor markets worldwide. The company offers discrete semiconductor products, such as MOSFETs, SiC MOSFETs; data line protection, power line protection, thyristers, USB Type-C protection, and transient voltage suppressors; Schottky, small signal switching, Zener, and SiC diodes; bridges, super barrier, Schottky, Schottky bridge, and fast/ultra-fast rectifiers; and bipolar, avalanche, gate driver, and pre-bias transistors. It also provides analog products, including power management devices comprising AC-DC and DC-DC converters, USB power switches, low dropout, photocoupler and linear voltage regulators; standard linear devices consisting of operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, such as hall-effect sensors and motor drivers. In addition, the company offers mixed-signal products, such as high speed mux/demux, digital switches, interface, redrivers, universal level shifters/voltage translators, clock ICs and packet switches; standard logic products comprising low-voltage complementary metal-oxide-semiconductor (CMOS) and advanced high-speed CMOS devices; ultra-low power CMOS logic; and analog switches; multichip products and co-packaged discrete, analog and mixed-signal silicon in miniature packages; and silicon and silicon epitaxial wafers used in manufacturing frequency control products and contact images sensors. It serves the industrial, automotive, computing, communications, and consumer markets through direct sales, marketing personnel, independent sales representatives, and distributors. The company was incorporated in 1959 and is headquartered in Plano, Texas.
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