Advanced Semiconductor Engnrng (NYSE: ASX) and Texas Instruments (NASDAQ:TXN) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Dividends

Advanced Semiconductor Engnrng pays an annual dividend of $0.16 per share and has a dividend yield of 2.5%. Texas Instruments pays an annual dividend of $2.48 per share and has a dividend yield of 2.5%. Advanced Semiconductor Engnrng pays out 34.8% of its earnings in the form of a dividend. Texas Instruments pays out 56.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Advanced Semiconductor Engnrng is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

5.8% of Advanced Semiconductor Engnrng shares are held by institutional investors. Comparatively, 84.0% of Texas Instruments shares are held by institutional investors. 22.9% of Advanced Semiconductor Engnrng shares are held by insiders. Comparatively, 1.0% of Texas Instruments shares are held by 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.

Risk and Volatility

Advanced Semiconductor Engnrng has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Texas Instruments has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Profitability

This table compares Advanced Semiconductor Engnrng and Texas Instruments’ 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%
Texas Instruments 29.98% 38.88% 25.30%

Earnings and Valuation

This table compares Advanced Semiconductor Engnrng and Texas Instruments’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Semiconductor Engnrng $8.53 billion 1.25 $659.30 million $0.46 14.00
Texas Instruments $13.37 billion 7.46 $3.60 billion $4.39 23.06

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

Analyst Ratings

This is a summary of current recommendations for Advanced Semiconductor Engnrng and Texas Instruments, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Semiconductor Engnrng 0 0 0 0 N/A
Texas Instruments 1 15 12 0 2.39

Texas Instruments has a consensus target price of $93.92, suggesting a potential downside of 7.21%. Given Texas Instruments’ higher possible upside, analysts plainly believe Texas Instruments is more favorable than Advanced Semiconductor Engnrng.

Summary

Texas Instruments beats Advanced Semiconductor Engnrng on 12 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 Texas Instruments

Texas Instruments Incorporated designs, makes and sells semiconductors to electronics designers and manufacturers across the world. The Company operates through two segments: Analog and Embedded Processing. As of December 31, 2016, the Company had design, manufacturing or sales operations in more than 30 countries. The Company’s Analog segment’s product line includes High Volume Analog & Logic (HVAL), Power Management (Power), High Performance Analog (HPA) and Silicon Valley Analog (SVA). HVAL products support applications, such as automotive safety devices, touchscreen controllers, low-voltage motor drivers and integrated motor controllers. The Company’s Embedded Processing segment’s product line includes Processor, Microcontrollers and Connectivity. Processor products include digital signal processors (DSPs) and applications processors. DSPs perform mathematical computations to process digital data.

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