Reviewing AU Optronics (AUO) & Sigma Designs (SIGM)

AU Optronics (NYSE:AUO) and Sigma Designs (NASDAQ:SIGM) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Dividends

AU Optronics pays an annual dividend of $0.36 per share and has a dividend yield of 8.9%. Sigma Designs does not pay a dividend. AU Optronics pays out 31.9% of its earnings in the form of a dividend.

Institutional and Insider Ownership

6.7% of AU Optronics shares are held by institutional investors. Comparatively, 76.0% of Sigma Designs shares are held by institutional investors. 16.0% of AU Optronics shares are held by company insiders. Comparatively, 4.5% of Sigma Designs shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares AU Optronics and Sigma Designs’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AU Optronics 4.54% 6.48% 3.33%
Sigma Designs N/A N/A N/A

Valuation & Earnings

This table compares AU Optronics and Sigma Designs’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AU Optronics $11.51 billion 0.34 $1.40 billion $1.13 3.58
Sigma Designs N/A N/A N/A N/A N/A

AU Optronics has higher revenue and earnings than Sigma Designs.

Analyst Recommendations

This is a summary of recent ratings for AU Optronics and Sigma Designs, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AU Optronics 2 2 0 0 1.50
Sigma Designs 0 4 0 0 2.00

Sigma Designs has a consensus price target of $7.05, indicating a potential upside of 4,306.25%. Given Sigma Designs’ stronger consensus rating and higher possible upside, analysts clearly believe Sigma Designs is more favorable than AU Optronics.

Summary

AU Optronics beats Sigma Designs on 6 of the 10 factors compared between the two stocks.

AU Optronics Company Profile

AU Optronics Corp. researches, develops, produces, and sells thin film transistor liquid crystal displays and other flat panel displays. The company operates through two segments, Display and Solar. The Display segment designs, develops, manufactures, assembles, and markets flat panel displays for use in televisions (TVs), TV sets, and other related products; desktop monitors; mobile PCs, such as notebooks and tablets; mobile phones; and commercial and other applications, including displays for automobiles, industrial PCs, automated teller machines, point of sale terminals, pachinko machines, medical equipment, and others. This segment serves original equipment manufacturing service providers; and brand companies. The Solar segment manufactures and sells solar materials, including ingots, solar wafers, and solar modules, as well as provides technical engineering and maintenance services for solar system projects. This segment sells its ingot and solar wafer products primarily to solar cell manufacturers; and solar modules to installers, solar system integrators, property developers, and other value-added resellers. The company also engages in the renewable energy power generation; repairing and sale support of TFT-LCD modules, as well as sale support of solar-related products; injecting and stamping parts; manufacture and sale of molds, light guide plates, liquid crystal products, backlight modules, and related parts, as well as precision plastic and metal parts; IP related business; design, development and sales of software and hardware for health care industry; manufacture, assembly, and sale of automotive parts; manufacture and sale of motorized treadmills; and planning, design, and development of construction for environmental protection and related project management. It operates in the People's Republic of China, Taiwan, Japan, Singapore, and internationally. AU Optronics Corp. was founded in 1996 and is headquartered in Hsinchu, Taiwan.

Sigma Designs Company Profile

Sigma Designs, Inc., an integrated system-on-chip solutions provider, provides intelligent platforms for use in the home entertainment, and home and industrial control appliances. The company offers mobile Internet of Things solutions used primarily for tracking applications, such as small tags that can be attached to track pets, keys, children, luggage, and vehicles. It also offers legacy products; and software development kits and engineering support services for hardware and software. The company markets and sells its products through direct sales force, manufacturer representatives, distributors, and resellers to end-product manufacturers, original equipment manufacturers, and original design manufacturers in Asia, North America, Europe, and internationally. Sigma Designs, Inc. was founded in 1982 and is headquartered in Fremont, California.

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