Silicon Motion Technology Corporation (SIMO) vs. Cavium (CAVM) Critical Survey
Silicon Motion Technology Corporation (NASDAQ: SIMO) and Cavium (NASDAQ:CAVM) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.
Volatility and Risk
Silicon Motion Technology Corporation has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Cavium has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.
Institutional & Insider Ownership
79.4% of Silicon Motion Technology Corporation shares are held by institutional investors. Comparatively, 98.7% of Cavium shares are held by institutional investors. 4.7% of Cavium shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Silicon Motion Technology Corporation pays an annual dividend of $0.79 per share and has a dividend yield of 1.7%. Cavium does not pay a dividend. Silicon Motion Technology Corporation pays out 31.1% of its earnings in the form of a dividend.
Valuation and Earnings
This table compares Silicon Motion Technology Corporation and Cavium’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Silicon Motion Technology Corporation||$562.80 million||3.00||$145.81 million||$2.54||18.61|
|Cavium||$865.94 million||5.50||$79.41 million||($2.96)||-23.38|
Silicon Motion Technology Corporation has higher revenue, but lower earnings than Cavium. Cavium is trading at a lower price-to-earnings ratio than Silicon Motion Technology Corporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and target prices for Silicon Motion Technology Corporation and Cavium, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Silicon Motion Technology Corporation||0||3||10||0||2.77|
Silicon Motion Technology Corporation currently has a consensus price target of $57.67, indicating a potential upside of 22.02%. Cavium has a consensus price target of $78.13, indicating a potential upside of 12.89%. Given Silicon Motion Technology Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Silicon Motion Technology Corporation is more favorable than Cavium.
This table compares Silicon Motion Technology Corporation and Cavium’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Silicon Motion Technology Corporation||17.18%||20.07%||15.08%|
Silicon Motion Technology Corporation Company Profile
Silicon Motion Technology Corporation is a fabless semiconductor company. The Company designs, develops and markets low-power semiconductor solutions to original equipment manufacturers (OEMs) and other customers in the mobile storage and mobile communications markets. It is engaged in developing negative-AND (NAND) flash controller integrated circuits (ICs) for solid-state storage devices and specialty radio frequency (RF) ICs for mobile devices. In the mobile storage market, the Company’s products are controllers used in embedded storage products, such as Solid State Drives (SSDs), and Embedded Multimedia Cards (eMMCs), as well as expandable storage products, such as flash memory cards and universal serial bus (USB) flash drives. For the mobile communications market, the Company’s products are handset transceivers and mobile television (TV) System on Chips (SoCs). The Company’s products are used in devices, such as smartphones, tablets and personal computers (PCs).
Cavium Company Profile
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.
Receive News & Ratings for Silicon Motion Technology Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Silicon Motion Technology Corporation and related companies with MarketBeat.com's FREE daily email newsletter.