Silicon Image (NASDAQ: SIMG) and Cree (NASDAQ:CREE) are both technology companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Institutional & Insider Ownership

91.2% of Cree shares are held by institutional investors. 1.3% of Cree shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Silicon Image and Cree, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silicon Image 0 0 0 0 N/A
Cree 2 9 2 0 2.00

Cree has a consensus price target of $23.32, indicating a potential downside of 5.52%. Given Cree’s higher possible upside, analysts plainly believe Cree is more favorable than Silicon Image.

Earnings and Valuation

This table compares Silicon Image and Cree’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Silicon Image N/A N/A N/A N/A N/A
Cree $1.47 billion 1.64 $101.00 million ($1.01) -24.44

Cree has higher revenue and earnings than Silicon Image.

Profitability

This table compares Silicon Image and Cree’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silicon Image 46.20% 56.01% 42.80%
Cree -7.17% -0.13% -0.11%

Summary

Cree beats Silicon Image on 5 of the 8 factors compared between the two stocks.

About Silicon Image

Silicon Image, Inc. is a provider of wired and wireless video, audio and data connectivity solutions for the mobile, consumer electronics and personal computer markets. The Company’s offerings include semiconductors and intellectual property. The Company also offers IP connectivity solutions for applications , such as Digital Rights Management provisioning, software management and remote support. The Company offers products under Mobile, CE, Wireless Fiber, PC, Simplay Labs, LLC and DVDO categories. Its Mobile MHL transmitters convert digital video, audio and data into the MHL format supporting resolutions up to 4K with multi-channel audio over a low pin count, connector agnostic interface. Dual mode port processors featuring MHL and HDMI functionality are designed for CE products. Its 60GHz RF Transceiver products are designed for use in 4G LTE small cells and Metro Wi-Fi and fixed wireless broadband point-to-point links.

About Cree

Cree, Inc. is a manufacturer of lighting-class light emitting diode (LED) products, lighting products and semiconductor products for power and radio-frequency (RF) applications. The Company’s products are focused for applications, such as indoor and outdoor lighting, video displays, transportation, electronic signs and signals, power supplies, inverters and wireless systems. The Company has three segments: Lighting Products, LED Products, and Power and RF Products. The Company’s Lighting Products segment offers LED lighting systems and bulbs. The Company’s LED Products segment offers LED components, LED chips and silicon carbide (SiC) materials. The Company’s Power and RF Products segment offers power devices and RF devices. The Company designs, manufactures and markets lighting systems for indoor and outdoor applications, with a focus on LED lighting systems for the commercial, industrial and consumer markets.

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