Contrasting Exar (NYSE:EXAR) & Microsemi (MSCC)

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

Institutional & Insider Ownership

97.5% of Microsemi shares are owned by institutional investors. Comparatively, 78.8% of Exar shares are owned by institutional investors. 0.6% of Microsemi shares are owned by insiders. Comparatively, 2.5% of Exar shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Microsemi and Exar’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Microsemi $1.81 billion 3.94 $176.30 million $1.74 34.87
Exar N/A N/A N/A $0.18 72.17

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

Analyst Ratings

This is a breakdown of recent recommendations for Microsemi and Exar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Microsemi 0 2 11 0 2.85
Exar 0 2 0 0 2.00

Microsemi currently has a consensus price target of $66.60, suggesting a potential upside of 9.76%. Exar has a consensus price target of $13.00, suggesting a potential upside of 0.08%. Given Microsemi’s stronger consensus rating and higher possible upside, equities analysts clearly believe Microsemi is more favorable than Exar.

Volatility & Risk

Microsemi has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, Exar has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Microsemi 11.10% 21.50% 9.55%
Exar 6.30% 2.37% 2.13%

Summary

Microsemi beats Exar on 9 of the 12 factors compared between the two stocks.

Microsemi Company Profile

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.

Exar Company Profile

Exar Corporation (Exar) designs, develops and markets analog mixed-signal integrated circuits (ICs) and sub-system solutions. The Company’s products are deployed in a range of applications, such as industrial, instrumentation and medical equipment, networking and telecommunication systems, servers, enterprise storage systems, flat panel displays, light emitting diode (LED) lighting solutions, set top boxes and digital video recorders. Exar’s product portfolio includes connectivity, power management, high performance analog, communications, processors, flat panel display and LED lighting. The Company designs and develops amplifiers and data converters that support a range of signal path and conditioning needs of networking, industrial control and embedded applications. The Company markets its products to three primary markets, such as industrial and embedded systems, consumer and infrastructure.

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