Broadcom (NASDAQ:AVGO) and Smartkem (NASDAQ:SMTK) Critical Analysis

Smartkem (NASDAQ:SMTK) and Broadcom (NASDAQ:AVGO) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Smartkem and Broadcom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smartkem	0	0	0	0	0.00
Broadcom	0	2	26	1	2.97

Broadcom has a consensus target price of $272.71, suggesting a potential upside of 11.48%. Given Broadcom’s stronger consensus rating and higher probable upside, analysts plainly believe Broadcom is more favorable than Smartkem.

Institutional and Insider Ownership

76.4% of Broadcom shares are owned by institutional investors. 8.7% of Smartkem shares are owned by insiders. Comparatively, 2.0% of Broadcom shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Smartkem and Broadcom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smartkem	N/A	-167.89%	-111.60%
Broadcom	11.43%	28.00%	11.16%

Valuation & Earnings

This table compares Smartkem and Broadcom”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smartkem	$105,000.00	51.06	-$8.50 million	($3.36)	-0.36
Broadcom	$57.05 billion	20.16	$5.90 billion	$2.67	91.62

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

Summary

Broadcom beats Smartkem on 12 of the 14 factors compared between the two stocks.

About Smartkem

SmartKem, Inc. engages in the development of materials and processes used to make organic thin-film transistors for the manufacture of flexible electronic. It focuses on Truflex semiconductor technology that deposits organic ink on a substrate. The company was founded on September 21, 2018 and is headquartered in Blackley, the United Kingdom.

About Broadcom

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices. The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.