Financial Analysis: Silicon Motion Technology (SIMO) vs. Kopin (NASDAQ:KOPN)

Kopin (NASDAQ: KOPN) and Silicon Motion Technology (NASDAQ:SIMO) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Kopin and Silicon Motion Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kopin -125.76% -37.28% -31.14%
Silicon Motion Technology 17.18% 19.58% 14.98%

Dividends

Silicon Motion Technology pays an annual dividend of $0.89 per share and has a dividend yield of 1.6%. Kopin does not pay a dividend. Silicon Motion Technology pays out 35.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Kopin and Silicon Motion Technology, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kopin 0 1 0 0 2.00
Silicon Motion Technology 0 3 10 0 2.77

Silicon Motion Technology has a consensus target price of $57.67, indicating a potential upside of 6.12%. Given Silicon Motion Technology’s stronger consensus rating and higher possible upside, analysts clearly believe Silicon Motion Technology is more favorable than Kopin.

Insider and Institutional Ownership

45.1% of Kopin shares are owned by institutional investors. Comparatively, 82.8% of Silicon Motion Technology shares are owned by institutional investors. 8.9% of Kopin shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Kopin has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Silicon Motion Technology has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.

Earnings and Valuation

This table compares Kopin and Silicon Motion Technology’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kopin $22.64 million 10.52 -$23.43 million ($0.41) -7.71
Silicon Motion Technology $556.15 million 3.45 $110.94 million $2.54 21.39

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

Summary

Silicon Motion Technology beats Kopin on 11 of the 15 factors compared between the two stocks.

About Kopin

Kopin Corporation is a developer, manufacturer and seller of Wearable technologies, which include components and systems. The Company’s segments are Forth Dimension Displays Ltd. (FDD), the manufacturer of its reflective display products for test and simulation products, and Kopin, which consists of Kopin Corporation, Kowon, Kopin Software Ltd. and e-MDT America (eMDT). Products, which include its components are augmented reality consumer wearable devices for sports and fitness and virtual reality consumer products for recreational and sport drones; military devices, such as thermal weapon sights and fighter pilot helmets, and industrial and public safety devices, such as fire fighter thermal camera enabled masks. Its reflective display products are also configured as spatial light modulators and are used in industrial equipment for three dimensional (3D) Automated Optical Inspection. It sells displays individually or in combination with its other components assembled in a unit.

About Silicon Motion Technology

Silicon Motion Technology Corporation is a fabless semiconductor company. The Company designs, develops and markets low-power semiconductor solutions to original equipment manufacturers (OEMs) and other customers in the mobile storage and mobile communications markets. It is engaged in developing negative-AND (NAND) flash controller integrated circuits (ICs) for solid-state storage devices and specialty radio frequency (RF) ICs for mobile devices. In the mobile storage market, the Company’s products are controllers used in embedded storage products, such as Solid State Drives (SSDs), and Embedded Multimedia Cards (eMMCs), as well as expandable storage products, such as flash memory cards and universal serial bus (USB) flash drives. For the mobile communications market, the Company’s products are handset transceivers and mobile television (TV) System on Chips (SoCs). The Company’s products are used in devices, such as smartphones, tablets and personal computers (PCs).

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