Contrasting AUO (OTCMKTS:AUOTY) and Canaan (NASDAQ:CAN)

Canaan (NASDAQ:CAN) and AUO (OTCMKTS:AUOTY) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, profitability and analyst recommendations.

Risk and Volatility

Canaan has a beta of 3.08, indicating that its stock price is 208% more volatile than the S&P 500. Comparatively, AUO has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Profitability

This table compares Canaan and AUO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canaan	-158.65%	-59.66%	-44.41%
AUO	N/A	N/A	N/A

Valuation and Earnings

This table compares Canaan and AUO”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canaan	$189.34 million	1.44	-$414.15 million	($2.05)	-0.47
AUO	N/A	N/A	N/A	N/A	N/A

AUO has lower revenue, but higher earnings than Canaan.

Institutional & Insider Ownership

70.1% of Canaan shares are held by institutional investors. 0.3% of Canaan shares are held by company insiders. Comparatively, 16.0% of AUO shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Canaan and AUO, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canaan	0	1	4	0	2.80
AUO	0	0	0	0	N/A

Canaan currently has a consensus price target of $3.38, suggesting a potential upside of 247.94%. Given Canaan’s higher probable upside, analysts plainly believe Canaan is more favorable than AUO.

Summary

Canaan beats AUO on 5 of the 9 factors compared between the two stocks.

About Canaan

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components in the People's Republic of China. It is also involved in the assembly and distribution of mining equipment and spare parts. The company has operations in the United States, Australia, Kazakhstan, Hong Kong, Canada, Mainland China, Thailand, Sweden, and internationally. Canaan Inc. was founded in 2013 and is based in Singapore.

About AUO

AUO Corporation researches, develops, produces, and sells thin film transistor liquid crystal displays (TFT-LCDs) and other flat panel displays for various applications. It operates through two segments, Display and Energy. The company designs, manufactures, and sells ingots, solar wafers, and solar modules, as well as provides technical engineering and maintenance services for solar system projects. It also sells and leases content management system and related hardware; designs digital signage content and field curation solutions; plans, designs, and develops construction project for environmental protection and related project management; and designs, manufactures, and sells TFT-LCD modules, TV sets and related parts, backlight modules, automotive parts, and precision plastic parts. In addition, the company engages in the development, manufacturing, and sale of medical equipment; services related to site rental and educational activities; research and development, and IP related business; solar power generation; and sale and sales support of TFTLCD panels. Further, it designs, develops, and sells software and hardware for health care industry; provides software and hardware integration system and equipment relating to intelligent manufacturing, as well as software development and related consulting services; and investment services. It operates in the People's Republic of China, Taiwan, the United States, Japan, Singapore, and internationally. The company was formerly known as AU Optronics Corp. and changed its name to AUO Corporation in June 2022. AUO Corporation was founded in 1996 and is headquartered in Hsinchu City, Taiwan.