Head to Head Survey: Microchip Technology (MCHP) vs. Diodes (DIOD)

Microchip Technology (NASDAQ:MCHP) and Diodes (NASDAQ:DIOD) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Volatility and Risk

Microchip Technology has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500. Comparatively, Diodes has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500.

Insider & Institutional Ownership

78.8% of Diodes shares are held by institutional investors. 2.1% of Microchip Technology shares are held by insiders. Comparatively, 6.7% of Diodes shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Microchip Technology and Diodes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Microchip Technology 0.59% 35.00% 10.80%
Diodes 3.75% 11.99% 7.48%

Valuation and Earnings

This table compares Microchip Technology and Diodes’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Microchip Technology $3.98 billion 4.17 $255.40 million $5.19 13.54
Diodes $1.05 billion 1.50 -$1.80 million $1.37 23.03

Microchip Technology has higher revenue and earnings than Diodes. Microchip Technology is trading at a lower price-to-earnings ratio than Diodes, indicating that it is currently the more affordable of the two stocks.

Dividends

Microchip Technology pays an annual dividend of $1.46 per share and has a dividend yield of 2.1%. Diodes does not pay a dividend. Microchip Technology pays out 28.1% of its earnings in the form of a dividend. Microchip Technology has increased its dividend for 16 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for Microchip Technology and Diodes, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Microchip Technology 0 6 12 0 2.67
Diodes 0 0 4 0 3.00

Microchip Technology currently has a consensus target price of $105.56, suggesting a potential upside of 50.24%. Diodes has a consensus target price of $38.00, suggesting a potential upside of 20.44%. Given Microchip Technology’s higher probable upside, equities research analysts plainly believe Microchip Technology is more favorable than Diodes.

Summary

Microchip Technology beats Diodes on 11 of the 17 factors compared between the two stocks.

Microchip Technology Company Profile

Microchip Technology Incorporated develops, manufactures, and sells semiconductor products for various embedded control applications. The company offers general purpose and specialized 8-bit, 16-bit, and 32-bit microcontrollers; 32-bit microprocessors; and microcontrollers for automotive networking, computing, lighting, power supplies, motor control, human machine interface, security, wired connectivity, and wireless connectivity. It also provides development tools that enable system designers to program microcontroller products for specific applications; analog, interface, mixed signal, and timing products comprising power management, linear, mixed-signal, high-voltage, thermal management, radio frequency (RF), drivers, safety, security, timing, USB, Ethernet, wireless, and other interface products; and memory products consisting of serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, and serial static random access memories for the production of very small footprint devices. In addition, the company licenses its SuperFlash embedded flash and Smartbits one time programmable NVM technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate array, RF, and analog products that require embedded non-volatile memory, as well as provides engineering services. Further, it provides wafer foundry and assembly and test subcontracting manufacturing services; and application specific integrated circuits, complex programmable logic devices, and aerospace products. It serves automotive, communications, computing, consumer, aerospace, defense, safety, security, medical, and industrial control markets. The company sells its products through a network of direct sales personnel and distributors in the Americas, Europe, and Asia. Microchip Technology Incorporated was founded in 1989 and is headquartered in Chandler, Arizona.

Diodes Company Profile

Diodes Incorporated, together with its subsidiaries, designs, manufactures, and supplies application-specific standard products in the discrete, logic, and analog and mixed semiconductor markets in Asia, North America, Europe, and internationally. It primarily focuses on low pin count semiconductor devices with one or more active or passive components. The company offers discrete semiconductor products, such as performance Schottky rectifiers and diodes; Zener diodes, including tight tolerance and low operating current type performance Zener diodes; standard, fast, super-fast, and ultra-fast recovery rectifiers; bridge rectifiers; switching diodes; small signal bipolar and pre-biased transistors; MOSFETs; thyristor surge protection devices; and transient voltage suppressors. It also provides analog products comprising power management devices consisting of AC-DC and DC-DC converters, USB power switches, and low dropout and linear voltage regulators; linear devices, such as operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, including hall-effect sensors and motor drivers. In addition, the company offers standard logic products comprising low-voltage complementary metal–oxide–semiconductor (CMOS) and high-speed CMOS devices; ultra-low power CMOS logic products and analog switches; multichip products and co-packaged discrete, analog, and mixed-signal silicon in miniature packages; silicon and silicon epitaxial wafers; and crystals and oscillators. It sells its products to the consumer electronics, computing, communications, industrial, and automotive markets through direct sales and marketing personnel, independent sales representatives, and distributors. Diodes Incorporated was founded in 1959 and is headquartered in Plano, Texas.

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