Financial Survey: STMicroelectronics N.V. (STM) & Cavium (CAVM)
Cavium (NASDAQ: CAVM) and STMicroelectronics N.V. (NYSE:STM) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitabiliy, earnings, analyst recommendations and risk.
Earnings and Valuation
This table compares Cavium and STMicroelectronics N.V.’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cavium||$731.01 million||6.19||$42.43 million||($2.93)||-22.74|
|STMicroelectronics N.V.||$7.18 billion||1.86||$1.11 billion||$0.36||41.95|
STMicroelectronics N.V. has higher revenue and earnings than Cavium. Cavium is trading at a lower price-to-earnings ratio than STMicroelectronics N.V., indicating that it is currently the more affordable of the two stocks.
STMicroelectronics N.V. pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Cavium does not pay a dividend. STMicroelectronics N.V. pays out 55.6% of its earnings in the form of a dividend.
Insider and Institutional Ownership
5.2% of STMicroelectronics N.V. shares are held by institutional investors. 4.7% of Cavium shares are held 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.
This table compares Cavium and STMicroelectronics N.V.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent recommendations for Cavium and STMicroelectronics N.V., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cavium presently has a consensus price target of $72.66, indicating a potential upside of 9.06%. STMicroelectronics N.V. has a consensus price target of $20.00, indicating a potential upside of 32.45%. Given STMicroelectronics N.V.’s higher probable upside, analysts plainly believe STMicroelectronics N.V. is more favorable than Cavium.
Volatility and Risk
Cavium has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, STMicroelectronics N.V. has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.
STMicroelectronics N.V. beats Cavium on 9 of the 16 factors compared between the two stocks.
Cavium, Inc. is a provider of integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. The Company’s products consist of multi-core processors for embedded and data center applications, network connectivity for server and switches, storage connectivity, and security processors for offload and appliance. A range of its products also include a suite of embedded security protocols that enable unified threat management (UTM), secure connectivity, network perimeter protection and deep packet inspection (DPI). The Company sells its products to networking original equipment manufacturers (OEM), which sell into the enterprise, datacenter, service provider, and broadband and consumer markets. In the enterprise market, its products are used in routers, switches, storage appliances, server connectivity for networking and storage, wireless local area networks and UTM.
About STMicroelectronics N.V.
STMicroelectronics N.V. is a global semiconductor company that designs, develops, manufactures and markets a range of products, including discrete and standard commodity components, and application-specific integrated circuits (ASICs) for analog, digital and mixed-signal applications. The Company’s segments include Automotive and Discrete Group (ADG), Analog and MEMS Group (AMG), Microcontrollers and Digital ICs Group (MDG), and Others. ADG comprises all dedicated automotive Integrated Circuits (ICs), and discrete and power transistor products. AMG includes low-power analog ICs for all markets; smart power products; Touch Screen Controllers; Low Power Connectivity solutions for Internet of Things (IoT), and power conversion products. MDG comprises general purpose and secure microcontrollers, and Electrically Erasable Programmable Read-Only Memory memories. The Others segment includes all the financial values related to the Imaging Product Division, Subsystems and other products.
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