Microsemi Corporation (NASDAQ: MSCC) and ON Semiconductor Corporation (NASDAQ:ON) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Profitability

This table compares Microsemi Corporation and ON Semiconductor Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Microsemi Corporation 6.90% 19.91% 8.20%
ON Semiconductor Corporation 5.88% 22.74% 6.46%

Analyst Ratings

This is a summary of current ratings and price targets for Microsemi Corporation and ON Semiconductor Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Microsemi Corporation 0 3 13 0 2.81
ON Semiconductor Corporation 1 3 14 1 2.79

Microsemi Corporation presently has a consensus target price of $58.27, suggesting a potential upside of 15.97%. ON Semiconductor Corporation has a consensus target price of $17.25, suggesting a potential upside of 4.86%. Given Microsemi Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Microsemi Corporation is more favorable than ON Semiconductor Corporation.

Volatility and Risk

Microsemi Corporation has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, ON Semiconductor Corporation has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500.

Insider and Institutional Ownership

99.0% of Microsemi Corporation shares are held by institutional investors. Comparatively, 95.9% of ON Semiconductor Corporation shares are held by institutional investors. 0.6% of Microsemi Corporation shares are held by insiders. Comparatively, 1.6% of ON Semiconductor Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Microsemi Corporation and ON Semiconductor Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Microsemi Corporation $1.79 billion 3.25 $550.50 million $1.06 47.41
ON Semiconductor Corporation $4.99 billion 1.39 $1.02 billion $0.68 24.19

ON Semiconductor Corporation has higher revenue and earnings than Microsemi Corporation. ON Semiconductor Corporation is trading at a lower price-to-earnings ratio than Microsemi Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

ON Semiconductor Corporation beats Microsemi Corporation on 8 of the 15 factors compared between the two stocks.

Microsemi Corporation Company Profile

Microsemi Corporation is a designer, manufacturer and marketer of analog and mixed-signal semiconductor solutions differentiated by power, security, reliability and performance. The Company offers a portfolio of semiconductor and system solutions for aerospace and defense, communications, data center and industrial markets. Its products include high-performance and radiation-hardened analog mixed-signal integrated circuits (ICs), field programmable gate arrays (FPGAs), system on chip solutions (SoCs) and application-specific integrated circuits (ASICs) and power management products. The Company’s marketed products include Switchtec PFX PCIe switch, Flashtec NVM Express (NVMe)2032 and NVMe2016 controllers, Flashtec NVM Express (NVMe)2108 eight channel and NVMe2104 four channel controllers, PDS-EM-8100 PoE 2.5 gigabits per second (Gbps) Multiplexer, Chip Scale Atomic Clock (CSAC) components and miTimePLL.

ON Semiconductor Corporation Company Profile

ON Semiconductor Corporation offers a portfolio of sensors, power management, connectivity, custom and system on chip (SoC), analog, logic, timing, and discrete devices. The Company’s segments include Power Solutions Group, Analog Solutions Group and Image Sensor Group. The Power Solutions Group offers a range of discrete, module and integrated semiconductor products. The Analog Solutions Group designs and develops analog, mixed-signal and logic application specific integrated circuits (ASICs) and application specific standard products (ASSPs), and power solutions. The Image Sensor Group designs and develops complementary metal oxide semiconductor (CMOS) and charge-coupled device (CCD) image sensors, as well as proximity sensors, image signal processors, and actuator drivers for autofocus and image stabilization for various end users in the automotive, industrial, consumer, wireless, medical, and aerospace/defense markets.

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