Maxim Integrated Products (NASDAQ: MXIM) and Sunedison Semiconductor (NASDAQ:SEMI) are both semiconductors – nec companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Maxim Integrated Products and Sunedison Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Maxim Integrated Products 25.48% 29.55% 15.06%
Sunedison Semiconductor -13.19% -24.50% -10.80%

Insider & Institutional Ownership

90.5% of Maxim Integrated Products shares are held by institutional investors. Comparatively, 63.0% of Sunedison Semiconductor shares are held by institutional investors. 1.1% of Maxim Integrated Products shares are held by insiders. Comparatively, 1.9% of Sunedison Semiconductor shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Maxim Integrated Products and Sunedison Semiconductor’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Maxim Integrated Products $2.30 billion 6.37 $571.61 million $2.05 25.32
Sunedison Semiconductor N/A N/A N/A ($5.29) -2.26

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

Dividends

Maxim Integrated Products pays an annual dividend of $1.44 per share and has a dividend yield of 2.8%. Sunedison Semiconductor does not pay a dividend. Maxim Integrated Products pays out 70.2% of its earnings in the form of a dividend. Maxim Integrated Products has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Maxim Integrated Products and Sunedison Semiconductor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Maxim Integrated Products 1 9 9 0 2.42
Sunedison Semiconductor 0 0 0 0 N/A

Maxim Integrated Products currently has a consensus price target of $52.05, suggesting a potential upside of 0.27%. Given Maxim Integrated Products’ higher probable upside, equities research analysts clearly believe Maxim Integrated Products is more favorable than Sunedison Semiconductor.

Summary

Maxim Integrated Products beats Sunedison Semiconductor on 10 of the 12 factors compared between the two stocks.

Maxim Integrated Products Company Profile

Maxim Integrated Products, Inc. is engaged in designing, developing, manufacturing and marketing a range of linear and mixed-signal integrated circuits, referred to as analog circuits. The Company also provides a range of high-frequency process technologies and capabilities for use in custom designs. The Company caters to automotive, communications and data center, computing, consumer and industrial markets. It offers a range of products, such as switching regulators, battery management, isolated power, charge pumps, linear regulators, light emitting diode (LED) drivers, motor driver integrated circuits (ICs), monitors and sequencers, transceivers, controllers and expanders, level translators, signal line protection ICs, broadband switches, powerline communications, real-time clocks, embedded security, microcontrollers, 1-Wire, iButton, data loggers, clock generation and distribution, memory products, optical, signal integrity, high-speed signaling, and display power and control.

Sunedison Semiconductor Company Profile

SunEdison Semiconductor Limited is engaged in the development, manufacture and sale of silicon wafers to the semiconductor industry. The Company also develops advanced substrates, such as epitaxial (EPI) wafers and wafers for the silicon-on-insulator (SOI) market, which enable computing and communications applications. Its products include polished wafers, EPI wafers and SOI wafers. The Company sells its products to the semiconductor manufacturers around the world, including integrated device manufacturers, pure-play semiconductor foundries and companies that specialize in wafer customization. It operates facilities in semiconductor manufacturing regions throughout the world, including Taiwan, Malaysia, South Korea, Italy, Japan, and the United States. Its wafers are used as the base substrate for the manufacture of various types of semiconductor devices, including microprocessors, memory, analog, mixed-signal and radio frequency (RF) integrated circuits, discrete and image sensors.

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