Disco (OTCMKTS:DSCSY – 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 valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.
Profitability
This table compares Disco and DAQO New Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Disco | 31.65% | 26.03% | 20.56% |
| DAQO New Energy | -32.92% | -3.19% | -2.94% |
Volatility and Risk
Disco has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, DAQO New Energy has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Disco | 0 | 1 | 1 | 0 | 2.50 |
| DAQO New Energy | 3 | 2 | 2 | 1 | 2.12 |
DAQO New Energy has a consensus target price of $22.35, suggesting a potential upside of 63.97%. Given DAQO New Energy’s higher possible upside, analysts clearly believe DAQO New Energy is more favorable than Disco.
Insider & Institutional Ownership
0.0% of Disco shares are owned by institutional investors. Comparatively, 47.2% of DAQO New Energy shares are owned by institutional investors. 24.3% of DAQO New Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Disco and DAQO New Energy”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Disco | $2.90 billion | 14.03 | $894.45 million | $0.87 | 43.14 |
| DAQO New Energy | $665.41 million | 1.39 | -$170.51 million | ($2.78) | -4.90 |
Disco has higher revenue and earnings than DAQO New Energy. DAQO New Energy is trading at a lower price-to-earnings ratio than Disco, indicating that it is currently the more affordable of the two stocks.
Summary
Disco beats DAQO New Energy on 10 of the 15 factors compared between the two stocks.
About Disco
Disco Corporation manufactures and sells precision cutting, grinding, and polishing machines in Japan and internationally. Its precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws. The company also offers precision processing tools, such as dicing blades, grinding wheels, and dry polishing wheels; and other products, such as accessory equipment. In addition, it is involved in the disassembly and recycling of precision cutting, grinding, and polishing machines, as well as provides training services for the maintenance and operation of its products. Further, the company leases precision machines; and purchases and sells used machines. Additionally, it manufactures precision diamond abrasive tools, as well as offers chargeable processing services. The company was founded in 1937 and is headquartered in Tokyo, Japan.
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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