Reviewing Fortive Corporation (FTV) and PDF Solutions (PDFS)

Fortive Corporation (NYSE: FTV) and PDF Solutions (NASDAQ:PDFS) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, profitability, risk, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Fortive Corporation and PDF Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fortive Corporation 14.39% 31.67% 11.32%
PDF Solutions 4.08% 2.10% 1.88%

Institutional and Insider Ownership

79.1% of Fortive Corporation shares are owned by institutional investors. Comparatively, 82.4% of PDF Solutions shares are owned by institutional investors. 12.1% of Fortive Corporation shares are owned by insiders. Comparatively, 16.2% of PDF Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Fortive Corporation has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500. Comparatively, PDF Solutions has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Fortive Corporation and PDF Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fortive Corporation 0 7 6 0 2.46
PDF Solutions 0 1 1 0 2.50

Fortive Corporation currently has a consensus price target of $69.50, indicating a potential downside of 3.81%. PDF Solutions has a consensus price target of $20.00, indicating a potential upside of 28.45%. Given PDF Solutions’ stronger consensus rating and higher possible upside, analysts plainly believe PDF Solutions is more favorable than Fortive Corporation.

Valuation and Earnings

This table compares Fortive Corporation and PDF Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Fortive Corporation $6.22 billion 4.03 $872.30 million $2.65 27.26
PDF Solutions $107.46 million 4.63 $9.10 million $0.14 111.21

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

Dividends

Fortive Corporation pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. PDF Solutions does not pay a dividend. Fortive Corporation pays out 10.6% of its earnings in the form of a dividend.

Fortive Corporation Company Profile

Fortive Corporation is a diversified industrial growth company. The Company designs, develops, manufactures and markets professional and engineered products, software and services for a range of end markets. The Company operates through two segments: Professional Instrumentation and Industrial Technologies. The Company’s brands operate in field instrumentation, transportation, sensing, product realization, automation and specialty, and franchise distribution markets. The Professional Instrumentation segment offers essential products, software and services used to create actionable intelligence by measuring and monitoring a range of physical parameters in industrial applications, including electrical current, radio frequency signals, distance, pressure and temperature. The Industrial Technologies segment offers critical technical equipment, components, software and services for manufacturing, repair and transportation markets around the world.

PDF Solutions Company Profile

PDF Solutions, Inc. is a provider of infrastructure technologies and services for integrated circuits (IC). The Company’s technologies and services focus on the IC manufacturing process life cycle. It operates in the segment of licensing and implementation of yield improvement solutions for integrated circuit manufacturers. The Company’s solutions combine software, test chips, an electrical wafer test system, methodologies and professional services. The Company has developed solutions for yield simulation, analysis, loss detection, and improvement. Its characterization vehicle infrastructure (CVi) enables customers to electrically characterize the manufacturing process, and establish fail-rate information needed to calibrate manufacturing yield models and prioritize yield improvement activities. Its Exensio YieldAware solution combines software and services to enable customers to collect and combine product test data and equipment signals during production.

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