Shares of computer peripherals producer Universal Display Corporation (OLED) have climbed 27.7% over the past year due to solid end-market demand and a flexible business model. With healthy fundamentals, this stock appears to be a promising investment option.

Universal Display is a leading developer of technology and intellectual property (IP) for the Organic Light Emitting Diodes (OLED) market. OLEDs are thin, lightweight, and power-efficient solid-state devices that emit light. They can be manufactured on flexible and rigid substrates, making them highly suitable for use in full-color displays and lighting products.

The technology of OLED is expected to eventually replace LED and liquid crystal display (LCD) technologies due to its energy efficiency, higher contrast ratio, better viewing angle, lower video response time, and smaller form factor. These superior properties provide ample room for growth.

Strong end-market demand also presents a significant growth opportunity for Universal Display. OLED is suitable for commercial usage in industries such as smartphones, television, virtual reality devices, and automotive markets. The increasing proliferation of smartphones, wearables, and tablets is driving the adoption of small-area OLEDs. Large-area OLED displays are increasingly used in televisions. Unlike LEDs, OLEDs can be viewed directly and don’t need diffusers. It is also expected to be cost-effective when manufactured in high volumes, making it suitable for commercial application in the solid-state lighting market.

Universal Display’s dominance in OLED technology is primarily driven by its strong portfolio of around 5,500 patents worldwide. The company’s UniversalPHOLED phosphorescent OLED technology produces OLEDs that are four times more efficient than fluorescent OLEDs and significantly more efficient than current LCDs, giving it a competitive advantage over other OLED makers.

Moreover, collaborations with leading centers of excellence like Princeton University, the University of Southern California, the University of Michigan, and PPG Industries will continue to strengthen its patent portfolio in the long haul. The development of a Blue Phosphorescent Emissive system is progressing steadily, and the introduction of the entire series of red, green, and blue phosphorescent emissive materials will likely open up several possibilities in a variety of OLED applications.

Universal Display has a long-term earnings growth expectation of 15.7% and has delivered an average earnings surprise of 15.4% over the last four quarters.

Other key picks in the technology industry include InterDigital, Inc. (IDCC), Akamai Technologies, Inc. (AKAM), and Viasat Inc. (VSAT).

InterDigital is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular and wireless 3G, 4G, and IEEE 802-related products and networks.

Akamai Technologies is a global provider of content delivery network and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video and audio, and business applications.

Viasat Inc. enjoys a leading position in the satellite and wireless communications market. The company designs, develops, and markets advanced digital satellite telecommunications and other wireless networking and signal processing equipment. Viasat serves its high-bandwidth, high-performance communications solutions to the public as well as military, enterprises, and government agencies.

In conclusion, Universal Display (OLED) is a solid portfolio pick due to its dominant position in OLED technology, strong patent portfolio, and growth opportunities in end-market demand.

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