STR Holdings (NASDAQ: STRI) and Tessera Holding Corporation (NASDAQ:XPER) are both small-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitabiliy, risk, earnings, analyst recommendations, institutional ownership and valuation.

Institutional & Insider Ownership

99.6% of Tessera Holding Corporation shares are held by institutional investors. 2.4% of Tessera Holding Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Tessera Holding Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 3.0%. STR Holdings does not pay a dividend. Tessera Holding Corporation pays out -111.1% of its earnings in the form of a dividend.

Profitability

This table compares STR Holdings and Tessera Holding Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
STR Holdings -82.06% -40.79% -34.24%
Tessera Holding Corporation -12.22% 11.06% 5.46%

Earnings and Valuation

This table compares STR Holdings and Tessera Holding Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
STR Holdings $17.40 million N/A -$10.40 million N/A N/A
Tessera Holding Corporation N/A N/A N/A ($0.72) -37.64

Tessera Holding Corporation has higher revenue, but lower earnings than STR Holdings.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for STR Holdings and Tessera Holding Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
STR Holdings 0 0 0 0 N/A
Tessera Holding Corporation 0 0 1 0 3.00

Tessera Holding Corporation has a consensus target price of $53.00, indicating a potential upside of 95.57%. Given Tessera Holding Corporation’s higher possible upside, analysts plainly believe Tessera Holding Corporation is more favorable than STR Holdings.

Summary

Tessera Holding Corporation beats STR Holdings on 9 of the 10 factors compared between the two stocks.

About STR Holdings

STR Holdings, Inc. is a holding company. The Company is a provider of encapsulants to the solar industry. Encapsulant is a component used to protect solar cells and hold solar modules together. The Company has developed ethylene-vinyl acetate (EVA)-based encapsulants for use in commercial solar module manufacturing. The Company’s encapsulant formulations offer a range of properties and processing attributes, including various curing times and temperatures that align with the requirements of its customers’ individual lamination processes and module constructions. The Company’s formulations can be used in both crystalline silicon and thin-film modules. The Company operates production facilities in Llanera, Asturias, Spain and Shajiabang, Changshu, Jiangsu Province, China. It has a total annual production capacity of approximately 5.1 gigawatts. Its customers are solar module manufacturers located mainly in North America, Europe and Asia.

About Tessera Holding Corporation

Tessera Holding Corporation is a product and technology licensing company. The Company’s technologies and intellectual property are deployed, in areas, such as audio, computational imaging, computer vision, mobile computing and communications, memory, data storage, three dimensional (3D) semiconductor interconnect and packaging. The Company delivers smart sight and sound solutions, and 3D semiconductor interconnect solutions for mobile devices, consumer electronics, and automotive markets. The Company also addresses technologies, such as Internet of Things (IoT) and augmented reality/virtual reality (AR/VR). It offers audio solutions for mobile devices, home theater systems and cinema. The Company’s subsidiaries include Tessera Technologies, Inc., DTS, Inc., Invensas Corporation and FotoNation.

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