Silicon Motion Technology (NASDAQ:SIMO) versus MACOM Technology Solutions (MTSI) Head-To-Head Contrast

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

Insider and Institutional Ownership

72.3% of Silicon Motion Technology shares are owned by institutional investors. Comparatively, 76.5% of MACOM Technology Solutions shares are owned by institutional investors. 32.4% of MACOM Technology Solutions shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Silicon Motion Technology 17.28% 19.02% 15.40%
MACOM Technology Solutions -30.19% -1.98% -0.89%

Dividends

Silicon Motion Technology pays an annual dividend of $1.19 per share and has a dividend yield of 2.9%. MACOM Technology Solutions does not pay a dividend. Silicon Motion Technology pays out 34.9% of its earnings in the form of a dividend. Silicon Motion Technology has raised its dividend for 3 consecutive years.

Volatility and Risk

Silicon Motion Technology has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, MACOM Technology Solutions has a beta of 2.22, suggesting that its share price is 122% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Silicon Motion Technology and MACOM Technology Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silicon Motion Technology 1 1 9 0 2.73
MACOM Technology Solutions 4 3 3 0 1.90

Silicon Motion Technology presently has a consensus price target of $50.40, indicating a potential upside of 21.89%. MACOM Technology Solutions has a consensus price target of $18.71, indicating a potential upside of 30.41%. Given MACOM Technology Solutions’ higher probable upside, analysts plainly believe MACOM Technology Solutions is more favorable than Silicon Motion Technology.

Earnings & Valuation

This table compares Silicon Motion Technology and MACOM Technology Solutions’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Silicon Motion Technology $530.35 million 2.82 $100.27 million $3.41 12.13
MACOM Technology Solutions $570.40 million 1.65 -$139.97 million $0.14 102.50

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

Summary

Silicon Motion Technology beats MACOM Technology Solutions on 10 of the 17 factors compared between the two stocks.

About Silicon Motion Technology

Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets semiconductor solutions for the mobile and enterprise storage, and mobile communications markets worldwide. It offers embedded storage and expandable storage products, including NAND flash controllers, such as embedded multimediacard (eMMC), universal flash storage, client solid-state drive (SSD), secure digital card, flash memory card controller, and universal serial bus flash drive controller products. The company also provides specialty storage solutions, such as customized enterprise-grade peripheral component interconnect express SSDs; and industrial-grade and commercial-grade single-chip SSDs. In addition, it offers specialty radio frequency integrated circuits (RF ICs), such as mobile TV system-on-chips (SoCs) and low power WiFi SoCs. The company's products are used in smartphones, tablets, digital cameras, camcorders, and desktop and notebook PCs, as well as in industrial, enterprise, commercial, and other applications. It offers its controllers under the SMI brand; enterprise-grade SSDs under the Shannon brand; single-chip industrial-grade SSDs under the Ferri SSD and Ferri-eMMC brands; RF ICs under the FCI brand; and software-defined storage products under the Bigtera brand. The company markets and sells its products through direct sales personnel and independent electronics distributors to flash manufacturers, original equipment manufacturers, and module makers. Silicon Motion Technology Corporation was founded in 1995 and is based in Kowloon, Hong Kong.

About MACOM Technology Solutions

MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog radio frequency (RF), microwave, millimeterwave, and lightwave spectrum products in the United States, China, the Asia Pacific, and internationally. The company offers a portfolio of standard and custom devices, including integrated circuits, multi-chip modules, power pallets and transistors, diodes, amplifiers, switches and switch limiters, passive and active components, and subsystems for approximately 60 product lines. Its semiconductor products are electronic components that are incorporated in electronic systems, such as wireless basestations, high density networks, active antenna arrays, radar, magnetic resonance imaging systems, and test and measurement. The company serves various markets comprising telecommunication that includes carrier infrastructure, which comprise long-haul/metro, 5G, and fiber-to-the-X/PON; data centers; and industrial and defense, including military and commercial radar, RF jammers, electronic countermeasures, and communication data links, as well as multi-market applications, such as industrial, medical, test and measurement, and scientific applications. It sells its products through direct sales force, applications engineering staff, independent sales representatives, resellers, and distributors, as well as an e-commerce channel. The company was founded in 1950 and is headquartered in Lowell, Massachusetts.

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