Head-To-Head Review: ON Semiconductor (ON) vs. NXP Semiconductors (NXPI)

ON Semiconductor (NASDAQ: ON) and NXP Semiconductors (NASDAQ:NXPI) are both mid-cap technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for ON Semiconductor and NXP Semiconductors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ON Semiconductor 1 7 11 0 2.53
NXP Semiconductors 0 14 0 1 2.13

ON Semiconductor presently has a consensus price target of $21.97, indicating a potential upside of 0.74%. NXP Semiconductors has a consensus price target of $112.29, indicating a potential downside of 4.80%. Given ON Semiconductor’s stronger consensus rating and higher possible upside, equities analysts clearly believe ON Semiconductor is more favorable than NXP Semiconductors.

Valuation & Earnings

This table compares ON Semiconductor and NXP Semiconductors’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ON Semiconductor $3.91 billion 2.37 $182.10 million $0.92 23.71
NXP Semiconductors $9.50 billion 4.21 $200.00 million $5.65 20.88

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

Profitability

This table compares ON Semiconductor and NXP Semiconductors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ON Semiconductor 7.22% 22.97% 6.91%
NXP Semiconductors 17.21% 15.89% 8.18%

Insider and Institutional Ownership

99.5% of ON Semiconductor shares are owned by institutional investors. Comparatively, 82.2% of NXP Semiconductors shares are owned by institutional investors. 1.4% of ON Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

ON Semiconductor has a beta of 2.02, suggesting that its stock price is 102% more volatile than the S&P 500. Comparatively, NXP Semiconductors has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Summary

ON Semiconductor beats NXP Semiconductors on 8 of the 15 factors compared between the two stocks.

ON Semiconductor Company Profile

ON Semiconductor Corporation offers a portfolio of sensors, power management, connectivity, custom and system on chip (SoC), analog, logic, timing, and discrete devices. The Company’s segments include Power Solutions Group, Analog Solutions Group and Image Sensor Group. The Power Solutions Group offers a range of discrete, module and integrated semiconductor products. The Analog Solutions Group designs and develops analog, mixed-signal and logic application specific integrated circuits (ASICs) and application specific standard products (ASSPs), and power solutions. The Image Sensor Group designs and develops complementary metal oxide semiconductor (CMOS) and charge-coupled device (CCD) image sensors, as well as proximity sensors, image signal processors, and actuator drivers for autofocus and image stabilization for various end users in the automotive, industrial, consumer, wireless, medical, and aerospace/defense markets.

NXP Semiconductors Company Profile

NXP Semiconductors N.V. (NXP) is a holding company. The Company operates as a semiconductor company. The Company provides high performance mixed signal and standard product solutions. The Company’s segments are High Performance Mixed Signal (HPMS), Standard Products (SP), and Corporate and Other. Its product solutions are used in a range of end-market applications, including automotive, personal security and identification, wireless and wireline infrastructure, mobile communications, multi-market industrial, consumer and computing. It engages with global original equipment manufacturers (OEMs) and sells products in all geographic regions. NXP’s HPMS segment includes business lines, such as Automotive, Secure Identification Solutions (SIS), Secure Connected Devices (SCD), and Secure Interfaces and Infrastructure (SI&I). The Company’s SP segment supplies a range of standard semiconductor components, such as small signal discretes and power discretes.

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