Onsemi (NASDAQ:ON) versus GlobalFoundries (NASDAQ:GFS) Financial Analysis

Onsemi (NASDAQ:ON) and GlobalFoundries (NASDAQ:GFS) are both large-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

97.7% of Onsemi shares are held by institutional investors. 0.3% of Onsemi shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Onsemi has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, GlobalFoundries has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500.

Earnings and Valuation

This table compares Onsemi and GlobalFoundries”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Onsemi	$6.67 billion	2.57	$1.57 billion	$1.44	28.46
GlobalFoundries	$6.79 billion	2.97	-$265.00 million	($0.34)	-107.03

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

Profitability

This table compares Onsemi and GlobalFoundries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Onsemi	22.21%	20.10%	12.36%
GlobalFoundries	-3.93%	6.05%	3.82%

Analyst Recommendations

This is a summary of current ratings for Onsemi and GlobalFoundries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Onsemi	1	9	13	0	2.52
GlobalFoundries	0	5	7	0	2.58

Onsemi presently has a consensus target price of $54.32, suggesting a potential upside of 32.55%. GlobalFoundries has a consensus target price of $48.33, suggesting a potential upside of 32.82%. Given GlobalFoundries’ stronger consensus rating and higher probable upside, analysts plainly believe GlobalFoundries is more favorable than Onsemi.

Summary

Onsemi beats GlobalFoundries on 9 of the 14 factors compared between the two stocks.

About Onsemi

onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions. The Advanced Solutions Group segment is involved in the designing and developing of analog, mixed-signal, advanced logic, ASSPs and ASICs, Wi-Fi and power solutions for a broad base of end-users in the automotive, consumer, computing, industrial, communications, medical and aerospace/defense markets. The Intelligent Sensing Group segment is focused on the designing and developing of CMOS and CCD image sensors, as well as proximity sensors, image signal processors, single photon detectors, inclu

About GlobalFoundries

GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.