Cypress Semiconductor Corporation (NASDAQ: CY) and United Microelectronics Corporation (NYSE:UMC) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Profitability

This table compares Cypress Semiconductor Corporation and United Microelectronics Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cypress Semiconductor Corporation -5.75% 9.01% 4.43%
United Microelectronics Corporation 6.90% 4.84% 2.71%

Valuation and Earnings

This table compares Cypress Semiconductor Corporation and United Microelectronics Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Cypress Semiconductor Corporation $1.92 billion 2.88 -$686.25 million ($0.40) -41.52
United Microelectronics Corporation $4.59 billion 1.39 $266.08 million $0.14 18.64

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

Dividends

Cypress Semiconductor Corporation pays an annual dividend of $0.44 per share and has a dividend yield of 2.6%. United Microelectronics Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 2.3%. Cypress Semiconductor Corporation pays out -110.0% of its earnings in the form of a dividend. United Microelectronics Corporation pays out 42.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cypress Semiconductor Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Cypress Semiconductor Corporation has a beta of 2.02, indicating that its stock price is 102% more volatile than the S&P 500. Comparatively, United Microelectronics Corporation has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cypress Semiconductor Corporation and United Microelectronics Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cypress Semiconductor Corporation 1 2 9 0 2.67
United Microelectronics Corporation 8 0 0 0 1.00

Cypress Semiconductor Corporation currently has a consensus target price of $17.55, indicating a potential upside of 5.63%. United Microelectronics Corporation has a consensus target price of $2.10, indicating a potential downside of 19.54%. Given Cypress Semiconductor Corporation’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Cypress Semiconductor Corporation is more favorable than United Microelectronics Corporation.

Institutional and Insider Ownership

97.6% of Cypress Semiconductor Corporation shares are owned by institutional investors. Comparatively, 5.2% of United Microelectronics Corporation shares are owned by institutional investors. 0.7% of Cypress Semiconductor Corporation shares are owned by insiders. Comparatively, 8.0% of United Microelectronics Corporation 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.

Summary

Cypress Semiconductor Corporation beats United Microelectronics Corporation on 11 of the 16 factors compared between the two stocks.

Cypress Semiconductor Corporation Company Profile

Cypress Semiconductor Corporation manufactures embedded system solutions for automotive, industrial, home automation and appliances, consumer electronics and medical products. The Company’s segments include Microcontroller and Connectivity Division (MCD), and Memory Products Division (MPD). MCD focuses on microcontroller (MCU), analog and wireless and wired connectivity solutions. MPD focuses on parallel and serial NOR flash memories, NAND flash memories, static random access memory (SRAM), ferroelectric-random access memory (F-RAM) ferroelectric memory devices and other specialty memories. The Company’s products include Traveo MCUs and Flexible MCUs; PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP; CapSense, and TrueTouch Analog Power Management integrated circuits (PMICs) and energy harvesting solutions.

United Microelectronics Corporation Company Profile

United Microelectronics Corporation is a global semiconductor foundry. The Company provides integrated circuit (IC) production for applications spanning every sector of the electronics industry. The Company operates through two segments: wafer fabrication and new business. The primary operating activity of the Company’s wafer fabrication segment is the manufacture of chips to the design specifications of its customers by using its own processes and techniques. The new business segment primarily includes researching, developing, manufacturing, and providing solar energy and new generation light-emitting diode (LED). The Company maintains a customer base across various industries, including communication, consumer electronics, computer, memory and others, while focusing on manufacturing for applications, including networking, telecommunications, Internet, multimedia, personal computers (PCs) and graphics.

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