MaxLinear (NYSE: MXL) and Cypress Semiconductor (NASDAQ:CY) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.

Dividends

Cypress Semiconductor pays an annual dividend of $0.44 per share and has a dividend yield of 3.0%. MaxLinear does not pay a dividend. Cypress Semiconductor pays out -110.0% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares MaxLinear and Cypress Semiconductor’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MaxLinear $387.83 million 4.38 $61.29 million $0.26 97.58
Cypress Semiconductor $1.92 billion 2.56 -$686.25 million ($0.40) -36.90

MaxLinear has higher earnings, but lower revenue than Cypress Semiconductor. Cypress Semiconductor is trading at a lower price-to-earnings ratio than MaxLinear, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares MaxLinear and Cypress Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MaxLinear 4.73% 20.96% 11.82%
Cypress Semiconductor -5.75% 9.01% 4.43%

Insider & Institutional Ownership

88.7% of MaxLinear shares are owned by institutional investors. Comparatively, 97.4% of Cypress Semiconductor shares are owned by institutional investors. 11.9% of MaxLinear shares are owned by company insiders. Comparatively, 0.7% of Cypress Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for MaxLinear and Cypress Semiconductor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MaxLinear 0 0 6 0 3.00
Cypress Semiconductor 1 3 8 0 2.58

MaxLinear currently has a consensus price target of $30.42, indicating a potential upside of 19.89%. Cypress Semiconductor has a consensus price target of $17.36, indicating a potential upside of 17.64%. Given MaxLinear’s stronger consensus rating and higher probable upside, analysts clearly believe MaxLinear is more favorable than Cypress Semiconductor.

Risk & Volatility

MaxLinear has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Cypress Semiconductor has a beta of 2.01, indicating that its stock price is 101% more volatile than the S&P 500.

Summary

MaxLinear beats Cypress Semiconductor on 9 of the 16 factors compared between the two stocks.

About MaxLinear

MaxLinear, Inc. is a provider of radio frequency (RF) and mixed-signal integrated circuits for cable and satellite broadband communications and the connected home, and wired and wireless infrastructure markets. The Company’s RF receiver products capture and process digital and analog broadband signals to be decoded for various applications. These products include both RF receivers and RF receiver systems-on-chip (SoCs), which incorporate its radio system architecture and the functionality necessary to receive and demodulate broadband signals, modem solutions, and physical medium devices that provide a constant current source, current-to-voltage regulation, and data alignment and retiming functionality in optical interconnect applications. It provides semiconductor solutions for the connected home, specifically Multimedia over Coax Alliance (MoCA) solutions. It sells its products to original equipment manufacturers (OEMs), module makers and original design manufacturers (ODMs).

About Cypress Semiconductor

Cypress Semiconductor Corporation manufactures embedded system solutions for automotive, industrial, home automation and appliances, consumer electronics and medical products. The Company’s segments include Microcontroller and Connectivity Division (MCD), and Memory Products Division (MPD). MCD focuses on microcontroller (MCU), analog and wireless and wired connectivity solutions. MPD focuses on parallel and serial NOR flash memories, NAND flash memories, static random access memory (SRAM), ferroelectric-random access memory (F-RAM) ferroelectric memory devices and other specialty memories. The Company’s products include Traveo MCUs and Flexible MCUs; PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP; CapSense, and TrueTouch Analog Power Management integrated circuits (PMICs) and energy harvesting solutions.

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