Power Integrations (NASDAQ: POWI) and Monolithic Power Systems (NASDAQ:MPWR) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.
Insider and Institutional Ownership
97.3% of Power Integrations shares are owned by institutional investors. Comparatively, 93.9% of Monolithic Power Systems shares are owned by institutional investors. 4.3% of Power Integrations shares are owned by company insiders. Comparatively, 4.0% of Monolithic Power Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Power Integrations has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Monolithic Power Systems has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.
Power Integrations pays an annual dividend of $0.56 per share and has a dividend yield of 0.7%. Monolithic Power Systems pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Power Integrations pays out 29.0% of its earnings in the form of a dividend. Monolithic Power Systems pays out 49.7% 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. Power Integrations is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current ratings and recommmendations for Power Integrations and Monolithic Power Systems, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Monolithic Power Systems||0||0||7||0||3.00|
Power Integrations presently has a consensus price target of $81.00, suggesting a potential upside of 4.85%. Monolithic Power Systems has a consensus price target of $127.71, suggesting a potential upside of 6.44%. Given Monolithic Power Systems’ stronger consensus rating and higher possible upside, analysts plainly believe Monolithic Power Systems is more favorable than Power Integrations.
This table compares Power Integrations and Monolithic Power Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Monolithic Power Systems||15.66%||15.40%||12.91%|
Earnings and Valuation
This table compares Power Integrations and Monolithic Power Systems’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Power Integrations||$387.39 million||5.93||$47.89 million||$1.93||40.03|
|Monolithic Power Systems||$388.67 million||12.82||$52.72 million||$1.61||74.53|
Monolithic Power Systems has higher revenue and earnings than Power Integrations. Power Integrations is trading at a lower price-to-earnings ratio than Monolithic Power Systems, indicating that it is currently the more affordable of the two stocks.
Monolithic Power Systems beats Power Integrations on 10 of the 16 factors compared between the two stocks.
About Power Integrations
Power Integrations, Inc. designs, develops and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion. The Company’s products are used in power converters that convert electricity from a high-voltage source to the type of power required for downstream use. The Company’s ICs used in alternating current (AC)-direct current (DC) power supply convert high-voltage AC from a wall outlet to the low-voltage DC required by electronic devices. The Company offers a range of products, such as TOPSwitch, TinySwitch, LinkSwitch and Hiper families. The Company also offers CapZero and SenZero families. The Company offers a range of high-voltage gate-driver products sold under the SCALE and SCALE-II product-family names. The DPA-Switch family of products is a monolithic high-voltage DC-DC power conversion IC designed specifically for use in distributed power architectures.
About Monolithic Power Systems
Monolithic Power Systems, Inc. designs, develops and markets integrated power semiconductor solutions and power delivery architectures. The Company operates in the design, development, marketing and sale of power solutions for the communications, storage and computing, consumer and industrial markets segment. The Company’s product families include Direct Current (DC) to DC Products, and Lighting Control Products. The Company’s DC to DC integrated circuits (ICs) are used to convert and control voltages within a range of electronic systems, such as portable electronic devices, wireless local area network (LAN) access points, computers, monitors, automobiles and medical equipment. Lighting control ICs are used in backlighting and general illumination products. In addition to Alternating Current (AC)/DC offline solutions for lighting illumination applications, the Company also offers AC/DC power conversion solutions for end products that plug into a wall outlet.
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