Diodes (NASDAQ: DIOD) and STMicroelectronics (NYSE:STM) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.
Earnings and Valuation
This table compares Diodes and STMicroelectronics’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Diodes||$1.05 billion||1.47||-$1.80 million||$0.88||35.74|
|STMicroelectronics||$8.35 billion||2.59||$802.00 million||$0.83||29.00|
STMicroelectronics pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Diodes does not pay a dividend. STMicroelectronics pays out 24.1% of its earnings in the form of a dividend.
This table compares Diodes and STMicroelectronics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
80.7% of Diodes shares are held by institutional investors. Comparatively, 4.7% of STMicroelectronics shares are held by institutional investors. 7.0% of Diodes shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Diodes has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, STMicroelectronics has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Diodes and STMicroelectronics, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Diodes presently has a consensus target price of $35.67, indicating a potential upside of 13.41%. STMicroelectronics has a consensus target price of $21.50, indicating a potential downside of 10.68%. Given Diodes’ higher probable upside, analysts clearly believe Diodes is more favorable than STMicroelectronics.
STMicroelectronics beats Diodes on 8 of the 15 factors compared between the two stocks.
Diodes Incorporated is a manufacturer and supplier of application-specific standard products within the discrete, logic, analog and mixed-signal semiconductor markets, serving the consumer electronics, computing, communications, industrial and automotive markets. The Company’s products include diodes; rectifiers; transistors; metal-oxide semiconductor field-effect transistors (MOSFETs); protection devices; amplifiers and comparators; Hall-effect and temperature sensors, and power management devices, including light emitting diode (LED) drivers, alternating current (AC)-direct current (DC) and DC-DC switching, linear voltage regulators and voltage references, along with special function devices, such as universal serial bus (USB) power switches, load switches, voltage supervisors and motor controllers. It also holds interests in Pericom Semiconductor Corporation, which designs, develops and markets integrated circuits (ICs) and frequency control products (FCPs).
STMicroelectronics N.V. is a global semiconductor company that designs, develops, manufactures and markets a range of products, including discrete and standard commodity components, and application-specific integrated circuits (ASICs) for analog, digital and mixed-signal applications. The Company’s segments include Automotive and Discrete Group (ADG), Analog and MEMS Group (AMG), Microcontrollers and Digital ICs Group (MDG), and Others. ADG comprises all dedicated automotive Integrated Circuits (ICs), and discrete and power transistor products. AMG includes low-power analog ICs for all markets; smart power products; Touch Screen Controllers; Low Power Connectivity solutions for Internet of Things (IoT), and power conversion products. MDG comprises general purpose and secure microcontrollers, and Electrically Erasable Programmable Read-Only Memory memories. The Others segment includes all the financial values related to the Imaging Product Division, Subsystems and other products.
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