Analyzing Himax Technologies (HIMX) & Monolithic Power Systems (NASDAQ:MPWR)

Monolithic Power Systems (NASDAQ: MPWR) and Himax Technologies (NASDAQ:HIMX) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Volatility & Risk

Monolithic Power Systems has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Himax Technologies has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.

Institutional & Insider Ownership

93.3% of Monolithic Power Systems shares are owned by institutional investors. Comparatively, 27.0% of Himax Technologies shares are owned by institutional investors. 4.0% of Monolithic Power Systems shares are owned by company insiders. Comparatively, 31.5% of Himax Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Monolithic Power Systems and Himax Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monolithic Power Systems $470.93 million 9.71 $52.72 million $1.49 73.88
Himax Technologies $802.92 million 1.72 $50.91 million $0.06 133.52

Monolithic Power Systems has higher earnings, but lower revenue than Himax Technologies. Monolithic Power Systems is trading at a lower price-to-earnings ratio than Himax Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Monolithic Power Systems and Himax Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monolithic Power Systems 0 0 7 0 3.00
Himax Technologies 3 2 9 0 2.43

Monolithic Power Systems presently has a consensus price target of $127.71, indicating a potential upside of 16.02%. Himax Technologies has a consensus price target of $10.52, indicating a potential upside of 31.29%. Given Himax Technologies’ higher possible upside, analysts clearly believe Himax Technologies is more favorable than Monolithic Power Systems.

Profitability

This table compares Monolithic Power Systems and Himax Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monolithic Power Systems 13.85% 16.91% 14.14%
Himax Technologies 1.25% 2.10% 1.24%

Dividends

Monolithic Power Systems pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Himax Technologies pays an annual dividend of $0.23 per share and has a dividend yield of 2.9%. Monolithic Power Systems pays out 53.7% of its earnings in the form of a dividend. Himax Technologies pays out 383.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Monolithic Power Systems beats Himax Technologies on 10 of the 16 factors compared between the two stocks.

Monolithic Power Systems Company Profile

Monolithic Power Systems, Inc. designs, develops and markets integrated power semiconductor solutions and power delivery architectures. The Company operates in the design, development, marketing and sale of power solutions for the communications, storage and computing, consumer and industrial markets segment. The Company’s product families include Direct Current (DC) to DC Products, and Lighting Control Products. The Company’s DC to DC integrated circuits (ICs) are used to convert and control voltages within a range of electronic systems, such as portable electronic devices, wireless local area network (LAN) access points, computers, monitors, automobiles and medical equipment. Lighting control ICs are used in backlighting and general illumination products. In addition to Alternating Current (AC)/DC offline solutions for lighting illumination applications, the Company also offers AC/DC power conversion solutions for end products that plug into a wall outlet.

Himax Technologies Company Profile

Himax Technologies, Inc. is a fabless semiconductor solution provider. The Company is engaged in display driver integrated circuits (IC) and timing controllers used in televisions, laptops, monitors, mobile phones, tablets, digital cameras, car navigation and other consumer electronics devices. The Company operates through two segments: Driver IC and Non-driver products. In addition, the Company designs and provides controllers for touch sensor displays, liquid crystal on silicon micro-displays used in palm-size projectors and head-mounted displays, light-emitting diode driver ICs, power management ICs, scaler products for monitors and projectors, video processing IC solutions and silicon IPs. It also offers digital camera solutions, including complementary metal-oxide-semiconductor image sensors and wafer level optics, which are used in a range of applications, such as mobile phone, tablet, laptop, televisions, personal computer camera, automobile, security and medical devices.

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