Critical Review: Advanced Micro Devices (AMD) & Silicon Motion Technology (SIMO)

Advanced Micro Devices (NASDAQ: AMD) and Silicon Motion Technology (NASDAQ:SIMO) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Advanced Micro Devices and Silicon Motion Technology, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Micro Devices 4 12 12 0 2.29
Silicon Motion Technology 1 1 11 0 2.77

Advanced Micro Devices currently has a consensus price target of $14.93, indicating a potential upside of 32.04%. Silicon Motion Technology has a consensus price target of $56.56, indicating a potential upside of 26.79%. Given Advanced Micro Devices’ higher possible upside, research analysts clearly believe Advanced Micro Devices is more favorable than Silicon Motion Technology.

Profitability

This table compares Advanced Micro Devices and Silicon Motion Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Micro Devices 0.81% 16.76% 2.38%
Silicon Motion Technology 14.34% 15.33% 11.63%

Dividends

Silicon Motion Technology pays an annual dividend of $0.89 per share and has a dividend yield of 2.0%. Advanced Micro Devices does not pay a dividend. Silicon Motion Technology pays out 42.8% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Advanced Micro Devices and Silicon Motion Technology’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Micro Devices $5.33 billion 2.05 $43.00 million $0.03 377.00
Silicon Motion Technology $523.40 million 3.01 $110.94 million $2.08 21.45

Silicon Motion Technology has lower revenue, but higher earnings than Advanced Micro Devices. Silicon Motion Technology is trading at a lower price-to-earnings ratio than Advanced Micro Devices, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Advanced Micro Devices has a beta of 2.7, suggesting that its stock price is 170% more volatile than the S&P 500. Comparatively, Silicon Motion Technology has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Institutional & Insider Ownership

61.0% of Advanced Micro Devices shares are owned by institutional investors. Comparatively, 82.9% of Silicon Motion Technology shares are owned by institutional investors. 1.6% of Advanced Micro Devices 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.

Advanced Micro Devices Company Profile

Advanced Micro Devices, Inc. is a global semiconductor company. The Company is engaged in offering x86 microprocessors, as standalone devices or as incorporated into an accelerated processing unit (APU), chipsets, discrete graphics processing units (GPUs) and professional graphics, and server and embedded processors and semi-custom System-on-Chip (SoC) products and technology for game consoles. The Company’s segments include the Computing and Graphics segment, and the Enterprise, Embedded and Semi-Custom segment. The Computing and Graphics segment primarily includes desktop and notebook processors and chipsets, discrete GPUs and professional graphics. The Enterprise, Embedded and Semi-Custom segment primarily includes server and embedded processors, semi-custom SoC products, development services, technology for game consoles and licensing portions of its intellectual property portfolio.

Silicon Motion Technology Company Profile

Silicon Motion Technology Corporation is a fabless semiconductor company. The Company designs, develops and markets low-power semiconductor solutions to original equipment manufacturers (OEMs) and other customers in the mobile storage and mobile communications markets. It is engaged in developing negative-AND (NAND) flash controller integrated circuits (ICs) for solid-state storage devices and specialty radio frequency (RF) ICs for mobile devices. In the mobile storage market, the Company’s products are controllers used in embedded storage products, such as Solid State Drives (SSDs), and Embedded Multimedia Cards (eMMCs), as well as expandable storage products, such as flash memory cards and universal serial bus (USB) flash drives. For the mobile communications market, the Company’s products are handset transceivers and mobile television (TV) System on Chips (SoCs). The Company’s products are used in devices, such as smartphones, tablets and personal computers (PCs).

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