Cohu (NASDAQ: COHU) and MACOM Technology Solutions Holdings (NASDAQ:MTSI) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Institutional & Insider Ownership

78.2% of Cohu shares are owned by institutional investors. Comparatively, 75.1% of MACOM Technology Solutions Holdings shares are owned by institutional investors. 6.0% of Cohu shares are owned by company insiders. Comparatively, 57.1% of MACOM Technology Solutions Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. MACOM Technology Solutions Holdings does not pay a dividend. Cohu pays out 34.8% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Cohu and MACOM Technology Solutions Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cohu 0 2 2 0 2.50
MACOM Technology Solutions Holdings 0 1 4 0 2.80

Cohu presently has a consensus target price of $23.67, indicating a potential upside of 31.34%. MACOM Technology Solutions Holdings has a consensus target price of $55.60, indicating a potential upside of 33.27%. Given MACOM Technology Solutions Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe MACOM Technology Solutions Holdings is more favorable than Cohu.

Valuation and Earnings

This table compares Cohu and MACOM Technology Solutions Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cohu $314.92 million 1.60 $37.41 million $0.69 26.12
MACOM Technology Solutions Holdings $685.09 million 3.91 $136.09 million ($2.50) -16.69

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

Volatility & Risk

Cohu has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, MACOM Technology Solutions Holdings has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Cohu 6.21% 11.59% 7.76%
MACOM Technology Solutions Holdings -22.43% 17.21% 7.73%

Summary

MACOM Technology Solutions Holdings beats Cohu on 10 of the 15 factors compared between the two stocks.

Cohu Company Profile

Cohu, Inc. is a supplier of semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors and thermal sub-systems used by global semiconductor manufacturers and test subcontractors. It develops, manufactures, sells and services a line of equipment capable of handling a range of integrated circuits and light-emitting diodes. It operates through semiconductor equipment segment. It offers products for the pick-and-place, gravity-feed, test-in-strip and turret handling, MEMS, burn-in and system-level test markets. It sells various products, including Delta MATRiX, Delta Pyramid, Delta Eclipse, Delta LinX, Rasco SO1000, Rasco SO2000, Rasco Saturn and Jupiter, Rasco Jaguar, Ismeca NY32, Ismeca NY20 and Delta Fusion HD. Its manufacturing operations are located in Malacca, Malaysia (handlers); Poway, California (thermal subsystems); Laguna, the Philippines (kits and contactors); Kolbermoor, Germany (handlers), and Osaka, Japan (contactors).

MACOM Technology Solutions Holdings Company Profile

MACOM Technology Solutions Holdings, Inc. is a provider of high-performance analog semiconductor solutions that enable Internet applications, the cloud-connected applications economy, and the networked battlefield across the radio frequency (RF), microwave, millimeterwave and photonic spectrum. It has multiple design centers, silicon, gallium arsenide and indium phosphide fabrication, manufacturing, assembly and test, and operational facilities throughout North America, Europe, Asia and Australia. It also offers foundry services. It offered a portfolio of over 4,500 standard and custom devices, which include integrated circuits, multi-chip modules, power pallets and transistors, diodes, amplifiers, switches and switch limiters, passive and active components and complete subsystems, across more than 40 product lines serving three primary markets, as of September 30, 2016. The Company’s products are RF Power Products, Optoelectronics and Photonic Solutions, among others.

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