Comparing Diodes (NASDAQ:DIOD) and Wolfspeed (NYSE:WOLF)

Diodes (NASDAQ:DIOD) and Wolfspeed (NYSE:WOLF) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Valuation and Earnings

This table compares Diodes and Wolfspeed’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diodes	$1.66 billion	1.96	$227.18 million	$3.67	19.24
Wolfspeed	$921.90 million	3.01	-$329.90 million	($6.46)	-3.42

Diodes has higher revenue and earnings than Wolfspeed. Wolfspeed is trading at a lower price-to-earnings ratio than Diodes, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Diodes has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Wolfspeed has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500.

Profitability

This table compares Diodes and Wolfspeed’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diodes	11.36%	9.11%	6.90%
Wolfspeed	-96.12%	-27.37%	-4.78%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Diodes and Wolfspeed, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diodes	0	3	2	0	2.40
Wolfspeed	1	9	4	0	2.21

Diodes currently has a consensus price target of $74.20, suggesting a potential upside of 5.08%. Wolfspeed has a consensus price target of $35.43, suggesting a potential upside of 60.46%. Given Wolfspeed’s higher probable upside, analysts plainly believe Wolfspeed is more favorable than Diodes.

Institutional and Insider Ownership

99.2% of Diodes shares are owned by institutional investors. 2.3% of Diodes shares are owned by company insiders. Comparatively, 0.9% of Wolfspeed shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Diodes beats Wolfspeed on 10 of the 14 factors compared between the two stocks.

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.

About Wolfspeed

Wolfspeed, Inc. operates as a powerhouse semiconductor company focuses on silicon carbide and gallium nitride (GaN) technologies in Europe, Hong Kong, China, rest of Asia-Pacific, the United States, and internationally. It offers silicon carbide and GaN materials, including silicon carbide bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers to manufacture products for RF, power, and other applications. The company also provides power devices, such as silicon carbide Schottky diodes, metal oxide semiconductor field effect transistors (MOSFETs), and power modules for customers and distributors to use in applications, including electric vehicles comprising charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications. In addition, it offers RF devices comprising GaN-based die, high-electron mobility transistors, monolithic microwave integrated circuits, and laterally diffused MOSFET power transistors for telecommunications infrastructure, military, and other commercial applications. The company was formerly known as Cree, Inc. and changed its name to Wolfspeed, Inc. in October 2021. Wolfspeed, Inc. was incorporated in 1987 and is headquartered in Durham, North Carolina.