Financial Review: Infineon Technologies (OTCMKTS:IFNNY) vs. Qualcomm (NASDAQ:QCOM)

Infineon Technologies (OTCMKTS:IFNNY) and Qualcomm (NASDAQ:QCOM) are both large-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, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Analyst Recommendations

This is a breakdown of current recommendations for Infineon Technologies and Qualcomm, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Infineon Technologies	0	2	0	1	2.67
Qualcomm	2	10	11	1	2.46

Qualcomm has a consensus target price of $168.48, indicating a potential upside of 21.99%. Given Qualcomm’s higher possible upside, analysts plainly believe Qualcomm is more favorable than Infineon Technologies.

Dividends

Infineon Technologies pays an annual dividend of $0.28 per share and has a dividend yield of 0.6%. Qualcomm pays an annual dividend of $3.56 per share and has a dividend yield of 2.6%. Infineon Technologies pays out 30.1% of its earnings in the form of a dividend. Qualcomm pays out 73.6% 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. Qualcomm has raised its dividend for 23 consecutive years. Qualcomm is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

0.2% of Infineon Technologies shares are held by institutional investors. Comparatively, 74.4% of Qualcomm shares are held by institutional investors. 0.1% of Qualcomm shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Infineon Technologies and Qualcomm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Infineon Technologies	7.51%	11.12%	6.42%
Qualcomm	11.96%	44.09%	20.50%

Valuation and Earnings

This table compares Infineon Technologies and Qualcomm”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Infineon Technologies	$16.21 billion	3.55	$1.12 billion	$0.93	50.32
Qualcomm	$44.28 billion	3.33	$5.54 billion	$4.84	28.54

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

Volatility & Risk

Infineon Technologies has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500. Comparatively, Qualcomm has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.

Summary

Qualcomm beats Infineon Technologies on 12 of the 17 factors compared between the two stocks.

About Infineon Technologies

Infineon Technologies AG designs, develops, manufactures, and markets semiconductors and semiconductor-based solutions worldwide. Its Automotive segment offers automotive microcontrollers; 3D ToF, magnetic, and pressure sensors; discrete power semiconductors; IGBT modules; industrial microcontrollers; power and memory ICs; transceivers; diodes, MOSEFTs, and modules; and voltage regulators for use in assistance and safety systems, comfort electronics, infotainment, powertrain, and security products. The company’s Green Industrial Power segment provides bare dies, discrete IGBTs, and driver ICs; SiC diodes, MOSFETs, and modules; and IGBT modules for home appliances, industrial drives, industrial power supplies, industrial robotics, industrial vehicles, and traction, as well as for energy generation, storage, and transmission. Its Power & Sensor Systems segment offers chips for gas and pressure sensors, and MEMS microphones; 3D ToF sensors; control ICs; discrete low-, mid-, and high-voltage power MOSFET; customized chips; GaN power switches; GPS low-noise amplifiers; low-voltage and high-voltage driver ICs; radar sensor ICs; RF antenna switches and power transistors; transient voltage suppressor diodes; SiC diode and MOSFETs; and USB controllers for use in audio amplifiers, automotive electronics, BLDC motors, cellular communications infrastructure, electric vehicle charging stations, human machine interaction, IoT, LED and conventional lighting systems, microinverter, mobile devices, power management, and special applications. The company’s Connected Secure Systems segment provides connectivity solutions, embedded security controllers, microcontrollers, and security controllers for authentication, automotive, consumer electronics, government identification document, IoT, mobile communication, payment system, ticketing, access control, and computing applications. Infineon Technologies AG was founded in 1999 and is headquartered in Neubiberg, Germany.

About Qualcomm

Qualcomm Incorporated engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, computing, multimedia, and position location products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, WCDMA, LTE and/or OFDMA-based 5G standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including 5G, artificial intelligence, automotive, consumer, enterprise, cloud, IoT, and extended reality, and investments, including non-marketable equity securities and, to a lesser extent, marketable equity securities, and convertible debt instruments. It also provides development, and other services and related products to the United States government agencies and their contractors. The company was incorporated in 1985 and is headquartered in San Diego, California.