Critical Analysis: ASE Technology (NYSE:ASX) versus MACOM Technology Solutions (NASDAQ:MTSI)

ASE Technology (NYSE:ASX) and MACOM Technology Solutions (NASDAQ:MTSI) are both large-cap technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.

Earnings & Valuation

This table compares ASE Technology and MACOM Technology Solutions”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ASE Technology	$20.73 billion	4.11	$1.28 billion	$1.07	35.65
MACOM Technology Solutions	$1.33 billion	14.80	$335.25 million	$4.30	59.83

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

Analyst Recommendations

This is a summary of current ratings and price targets for ASE Technology and MACOM Technology Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ASE Technology	0	1	0	1	3.00
MACOM Technology Solutions	0	3	10	2	2.93

MACOM Technology Solutions has a consensus price target of $316.25, suggesting a potential upside of 22.93%. Given MACOM Technology Solutions’ higher probable upside, analysts plainly believe MACOM Technology Solutions is more favorable than ASE Technology.

Risk & Volatility

ASE Technology has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500. Comparatively, MACOM Technology Solutions has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500.

Profitability

This table compares ASE Technology and MACOM Technology Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ASE Technology	9.77%	18.97%	7.40%
MACOM Technology Solutions	25.25%	22.46%	15.71%

Insider & Institutional Ownership

6.8% of ASE Technology shares are owned by institutional investors. Comparatively, 76.1% of MACOM Technology Solutions shares are owned by institutional investors. 22.9% of ASE Technology shares are owned by company insiders. Comparatively, 0.4% of MACOM Technology Solutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

MACOM Technology Solutions beats ASE Technology on 11 of the 15 factors compared between the two stocks.

About ASE Technology

ASE Technology Holding Co. provides semiconductor packaging and testing services, as well as electronics manufacturing services. Its semiconductor offerings include advanced packaging, wafer bumping and testing, which help customers assemble and validate chips for use in electronic devices. The company also provides electronics design and manufacturing services through Universal Scientific Industrial, serving customers across industries such as communications, computing, automotive and consumer electronics.

About MACOM Technology Solutions

MACOM Technology Solutions designs and supplies semiconductor products for applications that use radio frequency, microwave, millimeter-wave and optical signals. Its products include amplifiers, switches, diodes, mixers, attenuators and other components used in communications and electronic systems. The company serves customers in markets including telecommunications, data centers, aerospace and defense, and industrial applications. Its components are used in equipment such as wireless infrastructure, high-speed optical networks, radar and test systems.