Cavium (NASDAQ: CAVM) and Silicon Motion Technology Corporation (NASDAQ:SIMO) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.
Silicon Motion Technology Corporation pays an annual dividend of $0.89 per share and has a dividend yield of 1.9%. Cavium does not pay a dividend. Silicon Motion Technology Corporation pays out 35.0% of its earnings in the form of a dividend.
This table compares Cavium and Silicon Motion Technology Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Silicon Motion Technology Corporation||17.18%||19.58%||14.98%|
This is a summary of recent ratings and price targets for Cavium and Silicon Motion Technology Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Silicon Motion Technology Corporation||0||3||10||0||2.77|
Cavium currently has a consensus price target of $78.00, indicating a potential upside of 0.84%. Silicon Motion Technology Corporation has a consensus price target of $57.67, indicating a potential upside of 22.25%. Given Silicon Motion Technology Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Silicon Motion Technology Corporation is more favorable than Cavium.
Institutional & Insider Ownership
79.5% of Silicon Motion Technology Corporation shares are held by institutional investors. 4.7% of Cavium shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Cavium has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Silicon Motion Technology Corporation has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.
Valuation and Earnings
This table compares Cavium and Silicon Motion Technology Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Cavium||$603.31 million||8.86||-$147.20 million||($2.82)||-27.43|
|Silicon Motion Technology Corporation||$556.15 million||3.00||$110.94 million||$2.54||18.57|
Silicon Motion Technology Corporation has higher revenue, but lower earnings than Cavium. Cavium is trading at a lower price-to-earnings ratio than Silicon Motion Technology Corporation, indicating that it is currently the more affordable of the two stocks.
Silicon Motion Technology Corporation beats Cavium on 9 of the 16 factors compared between the two stocks.
Cavium Company Profile
Cavium, Inc. is a provider of integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. The Company’s products consist of multi-core processors for embedded and data center applications, network connectivity for server and switches, storage connectivity, and security processors for offload and appliance. A range of its products also include a suite of embedded security protocols that enable unified threat management (UTM), secure connectivity, network perimeter protection and deep packet inspection (DPI). The Company sells its products to networking original equipment manufacturers (OEM), which sell into the enterprise, datacenter, service provider, and broadband and consumer markets. In the enterprise market, its products are used in routers, switches, storage appliances, server connectivity for networking and storage, wireless local area networks and UTM.
Silicon Motion Technology Corporation Company Profile
Silicon Motion Technology Corporation is a fabless semiconductor company. The Company designs, develops and markets low-power semiconductor solutions to original equipment manufacturers (OEMs) and other customers in the mobile storage and mobile communications markets. It is engaged in developing negative-AND (NAND) flash controller integrated circuits (ICs) for solid-state storage devices and specialty radio frequency (RF) ICs for mobile devices. In the mobile storage market, the Company’s products are controllers used in embedded storage products, such as Solid State Drives (SSDs), and Embedded Multimedia Cards (eMMCs), as well as expandable storage products, such as flash memory cards and universal serial bus (USB) flash drives. For the mobile communications market, the Company’s products are handset transceivers and mobile television (TV) System on Chips (SoCs). The Company’s products are used in devices, such as smartphones, tablets and personal computers (PCs).
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