Contrasting Microsemi (MSCC) and Celestica (CLS)

Microsemi (NASDAQ: MSCC) and Celestica (NYSE:CLS) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Volatility & Risk

Microsemi has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Celestica has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Profitability

This table compares Microsemi and Celestica’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Microsemi 2.97% 2.96% 1.26%
Celestica 2.12% 13.64% 6.09%

Earnings and Valuation

This table compares Microsemi and Celestica’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Microsemi $1.79 billion 3.19 $550.50 million $1.06 46.60
Celestica $6.21 billion 0.29 $256.20 million $0.92 13.55

Microsemi has higher revenue, but lower earnings than Celestica. Celestica is trading at a lower price-to-earnings ratio than Microsemi, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

98.6% of Microsemi shares are owned by institutional investors. Comparatively, 59.8% of Celestica shares are owned by institutional investors. 0.6% of Microsemi shares are owned by insiders. Comparatively, 1.0% of Celestica shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Microsemi and Celestica, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Microsemi 0 2 13 0 2.87
Celestica 0 9 2 0 2.18

Microsemi presently has a consensus price target of $58.27, indicating a potential upside of 17.96%. Celestica has a consensus price target of $14.02, indicating a potential upside of 12.39%. Given Microsemi’s stronger consensus rating and higher probable upside, equities analysts plainly believe Microsemi is more favorable than Celestica.

Summary

Microsemi beats Celestica on 10 of the 14 factors compared between the two stocks.

About Microsemi

Microsemi Corporation is a designer, manufacturer and marketer of analog and mixed-signal semiconductor solutions differentiated by power, security, reliability and performance. The Company offers a portfolio of semiconductor and system solutions for aerospace and defense, communications, data center and industrial markets. Its products include high-performance and radiation-hardened analog mixed-signal integrated circuits (ICs), field programmable gate arrays (FPGAs), system on chip solutions (SoCs) and application-specific integrated circuits (ASICs) and power management products. The Company’s marketed products include Switchtec PFX PCIe switch, Flashtec NVM Express (NVMe)2032 and NVMe2016 controllers, Flashtec NVM Express (NVMe)2108 eight channel and NVMe2104 four channel controllers, PDS-EM-8100 PoE 2.5 gigabits per second (Gbps) Multiplexer, Chip Scale Atomic Clock (CSAC) components and miTimePLL.

About Celestica

Celestica Inc. is a provider of supply chain solutions. The Company operates in electronics manufacturing services business segment. The Company offers a range of services to its customers, including design and development, engineering services, supply chain management, new product introduction, component sourcing, electronics manufacturing, assembly and test, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics and after-market repair and return services. Its products and services serve a range of applications, including servers; storage systems; optical equipment; aerospace and defense electronics; healthcare products and applications; semiconductor equipment, and a range of industrial and alternative energy products, including solar panels and inverters. It designs, manufactures and tests solar panels for the residential, commercial and utility scale markets. It uses technologies in the assembly and testing of its products.

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