Advanced Semiconductor Engnrng (NYSE: ASX) and Inphi (NYSE:IPHI) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

5.8% of Advanced Semiconductor Engnrng shares are owned by institutional investors. 22.9% of Advanced Semiconductor Engnrng shares are owned by insiders. Comparatively, 3.6% of Inphi shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Advanced Semiconductor Engnrng and Inphi’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Semiconductor Engnrng 8.74% 13.80% 7.00%
Inphi -16.27% 7.79% 3.55%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Advanced Semiconductor Engnrng and Inphi, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Semiconductor Engnrng 0 0 0 0 N/A
Inphi 0 3 10 0 2.77

Inphi has a consensus target price of $44.50, suggesting a potential upside of 14.34%. Given Inphi’s higher probable upside, analysts clearly believe Inphi is more favorable than Advanced Semiconductor Engnrng.

Valuation and Earnings

This table compares Advanced Semiconductor Engnrng and Inphi’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Semiconductor Engnrng $8.53 billion 1.23 $659.30 million $0.46 13.80
Inphi $266.28 million 6.22 $99.45 million ($1.36) -28.62

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

Dividends

Advanced Semiconductor Engnrng pays an annual dividend of $0.16 per share and has a dividend yield of 2.5%. Inphi does not pay a dividend. Advanced Semiconductor Engnrng pays out 34.8% of its earnings in the form of a dividend.

Risk and Volatility

Advanced Semiconductor Engnrng has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, Inphi has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Summary

Advanced Semiconductor Engnrng beats Inphi on 9 of the 15 factors compared between the two stocks.

About Advanced Semiconductor Engnrng

Advanced Semiconductor Engineering, Inc. is a provider of semiconductor packaging and testing services. The Company offers a range of semiconductors packaging, testing and electronic manufacturing services (EMS). The Company’s segments include Packaging, Testing, EMS and Others. The Company provides services in packaging bare semiconductors into finished semiconductors with a range of electrical and thermal characteristics, as well as testing services, including front-end engineering testing, wafer probing and final testing services. It also sells goods from EMS. The Company engages in other activities, such as substrate production and real estate business. It provides integrated solutions for EMS in relation to computers, peripherals, communications, industrial, automotive, and storage and server applications. The Company provides front-end engineering testing services, including customized software development, electrical design validation, and reliability and failure analysis.

About Inphi

Inphi Corporation is a provider of analog and mixed signal semiconductor solutions for the communications and datacenter markets. The Company’s solutions provide an interface between analog signals and digital information in systems, such as telecommunications transport systems, enterprise networking equipment and datacenters. It is engaged in the design, development and sale of analog connectivity components that operate to maintain, amplify and manage signal integrity at high speeds in a range of applications. Its semiconductor solutions are designed to address bandwidth bottlenecks in networks and enable the rollout of communications and datacenter infrastructures. The Company provides 25 gigabit (G) to 600G high-speed analog semiconductor solutions for the communications market. As of December 31, 2016, the Company’s product portfolio included products that had commercially shipped, products for which the Company had shipped engineering samples and products under development.

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