Critical Analysis: Dialog Semiconductor (DLGNF) & Sequans Communications (SQNS)

Dialog Semiconductor (OTCMKTS: DLGNF) and Sequans Communications (NYSE:SQNS) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.

Insider & Institutional Ownership

25.9% of Sequans Communications shares are held by institutional investors. 9.4% of Sequans Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Dialog Semiconductor has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500. Comparatively, Sequans Communications has a beta of 2.38, indicating that its share price is 138% more volatile than the S&P 500.

Earnings & Valuation

This table compares Dialog Semiconductor and Sequans Communications’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dialog Semiconductor $1.35 billion 1.29 $173.91 million $2.92 7.65
Sequans Communications $48.26 million 3.00 -$26.16 million ($0.31) -5.84

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

Profitability

This table compares Dialog Semiconductor and Sequans Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dialog Semiconductor 11.66% 18.63% 15.99%
Sequans Communications -62.26% -243.68% -40.63%

Analyst Ratings

This is a breakdown of current ratings and target prices for Dialog Semiconductor and Sequans Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dialog Semiconductor 0 4 0 0 2.00
Sequans Communications 0 0 7 0 3.00

Sequans Communications has a consensus target price of $3.75, suggesting a potential upside of 107.18%. Given Sequans Communications’ stronger consensus rating and higher probable upside, analysts plainly believe Sequans Communications is more favorable than Dialog Semiconductor.

About Dialog Semiconductor

Dialog Semiconductor Plc develops and distributes highly integrated, mixed signal integrated circuits (ICs) for personal, portable, hand-held devices, low energy short-range wireless, LED solid-state lighting, and automotive applications worldwide. It operates through four segments: Mobile Systems, Automotive & Industrial, Connectivity, and Power Conversion. The company offers power management integrated circuits (PMICs), sub-PMICs, charger ICs, automotive grade PMICs, and audio codecs; Bluetooth low energy ICs, voice over DECT, digital audio and audio codec ICs, and short-range wireless VoIP; AC/DC rapid charge adapters, converters, power adapters, embedded networking converters, and SSL LED and backlight drivers; and motor control ICS and ASIC controllers. It offers its products under the PrimAccurate, Rapid Charge, SmartBond, SmartDefender, SmartMirror, SmartPulse, SmarteXite, SmartXtend, and Ultrabook brands. Dialog Semiconductor Plc was founded in 1986 and is headquartered in Reading, the United Kingdom.

About Sequans Communications

Sequans Communications S.A., together with its subsidiaries, engages in fabless designing, developing, and supplying 4G LTE semiconductor solutions for wireless broadband applications. Its solutions incorporate baseband processor and radio frequency (RF) transceiver integrated circuits along with proprietary signal processing techniques, algorithms, and software stacks. The company offers baseband solutions used to encode and decode data based on 4G protocols that serve as the wireless processing platform for a 4G device; RF transceivers used to transmit and receive wireless transmissions; and system-on-chip solutions that integrate the baseband and RF transceiver functions. Its solutions serves as the wireless communications platform in various devices, including smartphones; USB dongles; portable routers; embedded wireless modems for computing and multimedia devices; and customer-premises equipment, such as fixed wireless broadband access modems, routers, and residential gateways. The company serves OEMs, ODMs, contract manufacturers, or system integrators, as well as distributors who provide customer communications, logistics, and support functions. It operates in the Asia-Pacific region, including Taiwan, China, South Korea, and Japan; India; Europe; the Middle East; and North and South America. Sequans Communications S.A. was founded in 2003 and is headquartered in Paris, France.

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