STMicroelectronics (STM) versus The Competition Head-To-Head Review

STMicroelectronics (NYSE:STM) is one of 221 public companies in the “Semiconductors & Semiconductor Equipment” industry, but how does it contrast to its peers? We will compare STMicroelectronics to related businesses based on the strength of its institutional ownership, valuation, earnings, risk, profitability, dividends and analyst recommendations.

Dividends

STMicroelectronics pays an annual dividend of $0.31 per share and has a dividend yield of 0.7%. STMicroelectronics pays out 55.4% of its earnings in the form of a dividend. As a group, “Semiconductors & Semiconductor Equipment” companies pay a dividend yield of 1.0% and pay out 28.8% of their earnings in the form of a dividend. STMicroelectronics lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Volatility and Risk

STMicroelectronics has a beta of 2, meaning that its share price is 100% more volatile than the S&P 500. Comparatively, STMicroelectronics’ peers have a beta of 2.80, meaning that their average share price is 180% more volatile than the S&P 500.

Earnings & Valuation

This table compares STMicroelectronics and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
STMicroelectronics	$11.80 billion	$166.00 million	79.00
STMicroelectronics Competitors	$7.38 billion	$2.49 billion	8.42

STMicroelectronics has higher revenue, but lower earnings than its peers. STMicroelectronics is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of current ratings and price targets for STMicroelectronics and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STMicroelectronics	0	6	13	0	2.68
STMicroelectronics Competitors	3509	12369	25809	1000	2.57

STMicroelectronics currently has a consensus target price of $75.06, indicating a potential upside of 69.65%. As a group, “Semiconductors & Semiconductor Equipment” companies have a potential upside of 45.33%. Given STMicroelectronics’ stronger consensus rating and higher possible upside, equities analysts clearly believe STMicroelectronics is more favorable than its peers.

Profitability

This table compares STMicroelectronics and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STMicroelectronics	3.80%	4.71%	3.31%
STMicroelectronics Competitors	-1,278.97%	-126.38%	-4.00%

Insider and Institutional Ownership

5.0% of STMicroelectronics shares are held by institutional investors. Comparatively, 54.8% of shares of all “Semiconductors & Semiconductor Equipment” companies are held by institutional investors. 11.5% of shares of all “Semiconductors & Semiconductor Equipment” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

STMicroelectronics beats its peers on 8 of the 15 factors compared.

About STMicroelectronics

STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments. The Automotive and Discrete Group segment offers automotive integrated circuits (ICs), and discrete and power transistor products. The Analog, MEMS and Sensors Group segment provides industrial application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs); general purpose analog products; custom analog ICs; wireless charging solutions; galvanic isolated gate drivers; low and high voltage amplifiers, comparators, and current-sense amplifiers; MasterGaN, a solution that integrates a silicon driver and GaN power transistors in a single package; wireline and wireless connectivity ICs; touch screen controllers; micro-electro-mechanical systems (MEMS) products, including sensors or actuators; and optical sensing solutions. The Microcontrollers and Digital ICs Group segment offers general purpose and secure microcontrollers; and radio frequency (RF) products. It also offers application-specific standard products for analog, digital and mixed-signal applications. In addition, the company provides assembly and other services. It sells its products through distributors and retailers, as well as through sales representatives. The company serves automotive, industrial, personal electronics and communications equipment, and computers and peripherals markets. STMicroelectronics N.V. was incorporated in 1987 and is headquartered in Geneva, Switzerland.