Advanced Semiconductor Engineering (ASX) versus Monolithic Power Systems (MPWR) Critical Survey

Advanced Semiconductor Engineering (NYSE: ASX) and Monolithic Power Systems (NASDAQ:MPWR) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.

Dividends

Advanced Semiconductor Engineering pays an annual dividend of $0.16 per share and has a dividend yield of 2.7%. Monolithic Power Systems pays an annual dividend of $0.80 per share and has a dividend yield of 0.8%. Advanced Semiconductor Engineering pays out 36.4% of its earnings in the form of a dividend. Monolithic Power Systems pays out 56.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Advanced Semiconductor Engineering is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Advanced Semiconductor Engineering and Monolithic Power Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Advanced Semiconductor Engineering $9.36 billion 1.04 $1.83 billion $0.44 13.61
Monolithic Power Systems $422.63 million 10.11 $80.16 million $1.41 73.23

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

Risk & Volatility

Advanced Semiconductor Engineering has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Monolithic Power Systems has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Advanced Semiconductor Engineering and Monolithic Power Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Semiconductor Engineering 0 1 0 0 2.00
Monolithic Power Systems 0 0 7 1 3.13

Monolithic Power Systems has a consensus price target of $114.14, suggesting a potential upside of 10.54%. Given Monolithic Power Systems’ stronger consensus rating and higher probable upside, analysts clearly believe Monolithic Power Systems is more favorable than Advanced Semiconductor Engineering.

Profitability

This table compares Advanced Semiconductor Engineering and Monolithic Power Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Semiconductor Engineering 8.48% 14.06% 6.76%
Monolithic Power Systems 14.30% 14.10% 11.84%

Insider & Institutional Ownership

5.9% of Advanced Semiconductor Engineering shares are owned by institutional investors. Comparatively, 93.4% of Monolithic Power Systems shares are owned by institutional investors. 22.9% of Advanced Semiconductor Engineering shares are owned by insiders. Comparatively, 4.0% of Monolithic Power Systems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Monolithic Power Systems beats Advanced Semiconductor Engineering on 12 of the 17 factors compared between the two stocks.

Advanced Semiconductor Engineering Company Profile

Advanced Semiconductor Engineering, Inc. is a provider of semiconductor packaging and testing services. The Company offers a range of semiconductors packaging, testing and electronic manufacturing services (EMS). The Company’s segments include Packaging, Testing, EMS and Others. The Company provides services in packaging bare semiconductors into finished semiconductors with a range of electrical and thermal characteristics, as well as testing services, including front-end engineering testing, wafer probing and final testing services. It also sells goods from EMS. The Company engages in other activities, such as substrate production and real estate business. It provides integrated solutions for EMS in relation to computers, peripherals, communications, industrial, automotive, and storage and server applications. The Company provides front-end engineering testing services, including customized software development, electrical design validation, and reliability and failure analysis.

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.

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