Himax Technologies (NASDAQ: HIMX) and Mellanox Technologies (NASDAQ:MLNX) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Valuation and Earnings

This table compares Himax Technologies and Mellanox Technologies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Himax Technologies $802.92 million 2.26 $50.91 million $0.06 175.53
Mellanox Technologies $857.50 million 3.73 $18.51 million ($0.16) -392.19

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

Volatility and Risk

Himax Technologies has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Mellanox Technologies has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Profitability

This table compares Himax Technologies and Mellanox Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Himax Technologies 1.25% 2.10% 1.24%
Mellanox Technologies -0.92% 4.76% 3.24%

Dividends

Himax Technologies pays an annual dividend of $0.23 per share and has a dividend yield of 2.2%. Mellanox Technologies does not pay a dividend. Himax Technologies pays out 383.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

26.9% of Himax Technologies shares are held by institutional investors. Comparatively, 60.8% of Mellanox Technologies shares are held by institutional investors. 31.5% of Himax Technologies shares are held by insiders. Comparatively, 6.1% of Mellanox Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Himax Technologies and Mellanox Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Himax Technologies 3 3 9 0 2.40
Mellanox Technologies 1 7 5 0 2.31

Himax Technologies currently has a consensus target price of $9.86, indicating a potential downside of 6.35%. Mellanox Technologies has a consensus target price of $56.89, indicating a potential downside of 9.34%. Given Himax Technologies’ stronger consensus rating and higher probable upside, research analysts plainly believe Himax Technologies is more favorable than Mellanox Technologies.

Summary

Himax Technologies beats Mellanox Technologies on 10 of the 16 factors compared between the two stocks.

Himax Technologies Company Profile

Himax Technologies, Inc. is a fabless semiconductor solution provider. The Company is engaged in display driver integrated circuits (IC) and timing controllers used in televisions, laptops, monitors, mobile phones, tablets, digital cameras, car navigation and other consumer electronics devices. The Company operates through two segments: Driver IC and Non-driver products. In addition, the Company designs and provides controllers for touch sensor displays, liquid crystal on silicon micro-displays used in palm-size projectors and head-mounted displays, light-emitting diode driver ICs, power management ICs, scaler products for monitors and projectors, video processing IC solutions and silicon IPs. It also offers digital camera solutions, including complementary metal-oxide-semiconductor image sensors and wafer level optics, which are used in a range of applications, such as mobile phone, tablet, laptop, televisions, personal computer camera, automobile, security and medical devices.

Mellanox Technologies Company Profile

Mellanox Technologies, Ltd. is a fabless semiconductor company. The Company is an integrated supplier of interconnect products and solutions based on the InfiniBand and Ethernet standards. The Company operates in the development, manufacturing, marketing and sales of interconnect products segment. Its products facilitate data transmission between servers, storage systems, communications infrastructure equipment and other embedded systems. It operates its business globally and offers products to customers at various levels of integration. The products it offers include integrated circuits (ICs), adapter cards, switch systems, multi-core and network processors, cables, modules, software, services and accessories. Together these products form a networking solution, focused on computing, storage and communication applications used in multiple markets, including high-performance computing (HPC), cloud, Web 2.0, storage, financial services, and enterprise data center (EDC).

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