Analyzing NXP Semiconductors (NASDAQ:NXPI) & Silicon Motion Technology (NASDAQ:SIMO)

NXP Semiconductors (NASDAQ:NXPI) and Silicon Motion Technology (NASDAQ:SIMO) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, valuation, analyst recommendations, institutional ownership and risk.

Earnings and Valuation

This table compares NXP Semiconductors and Silicon Motion Technology”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NXP Semiconductors	$13.11 billion	4.58	$2.80 billion	$10.83	21.70
Silicon Motion Technology	$774.69 million	2.62	$52.87 million	$1.76	34.20

NXP Semiconductors has higher revenue and earnings than Silicon Motion Technology. NXP Semiconductors 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.

Dividends

NXP Semiconductors pays an annual dividend of $4.05 per share and has a dividend yield of 1.7%. Silicon Motion Technology pays an annual dividend of $1.99 per share and has a dividend yield of 3.3%. NXP Semiconductors pays out 37.4% of its earnings in the form of a dividend. Silicon Motion Technology pays out 113.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

NXP Semiconductors has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500. Comparatively, Silicon Motion Technology has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for NXP Semiconductors and Silicon Motion Technology, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NXP Semiconductors	1	5	13	0	2.63
Silicon Motion Technology	1	0	8	0	2.78

NXP Semiconductors presently has a consensus price target of $291.47, suggesting a potential upside of 24.05%. Silicon Motion Technology has a consensus price target of $86.11, suggesting a potential upside of 43.07%. Given Silicon Motion Technology’s stronger consensus rating and higher possible upside, analysts clearly believe Silicon Motion Technology is more favorable than NXP Semiconductors.

Insider & Institutional Ownership

90.5% of NXP Semiconductors shares are owned by institutional investors. Comparatively, 78.0% of Silicon Motion Technology shares are owned by institutional investors. 0.1% of NXP Semiconductors shares are owned by company insiders. Comparatively, 5.3% of Silicon Motion Technology shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NXP Semiconductors	21.21%	35.65%	13.51%
Silicon Motion Technology	10.14%	10.31%	7.79%

Summary

NXP Semiconductors beats Silicon Motion Technology on 11 of the 16 factors compared between the two stocks.

About NXP Semiconductors

NXP Semiconductors N.V. offers various semiconductor products. The company's product portfolio includes microcontrollers; application processors, including i.MX application processors, and i.MX 8 and 9 family of applications processors; communication processors; wireless connectivity solutions, such as near field communications, ultra-wideband, Bluetooth low-energy, Zigbee, and Wi-Fi and Wi-Fi/Bluetooth integrated SoCs; analog and interface devices; radio frequency power amplifiers; and security controllers, as well as semiconductor-based environmental and inertial sensors, including pressure, inertial, magnetic, and gyroscopic sensors. Its products are used in various applications, including automotive, industrial and Internet of Things, mobile, and communication infrastructure. The company markets its products to various original equipment manufacturers, contract manufacturers, and distributors. It operates in China, the Netherlands, the United States, Singapore, Germany, Japan, South Korea, Taiwan, and internationally. N.V. was incorporated in 2006 and is headquartered in Eindhoven, the Netherlands.

About Silicon Motion Technology

Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. The company offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the FerriSSD, Ferri-eMMC, and Ferri-UFS brands. The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, Korea, China, Malaysia, Singapore, and internationally. The company was founded in 1995 and is based in Hong Kong, Hong Kong.