Comparing Power Integrations (NASDAQ:POWI) & Silicon Motion Technology (NASDAQ:SIMO)

Power Integrations (NASDAQ:POWIGet Rating) and Silicon Motion Technology (NASDAQ:SIMOGet Rating) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Dividends

Power Integrations pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Silicon Motion Technology pays an annual dividend of $1.99 per share and has a dividend yield of 2.8%. Power Integrations pays out 23.4% of its earnings in the form of a dividend. Silicon Motion Technology pays out 30.8% 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. Power Integrations has raised its dividend for 8 consecutive years.

Volatility and Risk

Power Integrations has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Silicon Motion Technology has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

97.4% of Power Integrations shares are held by institutional investors. Comparatively, 72.1% of Silicon Motion Technology shares are held by institutional investors. 1.6% of Power Integrations shares are held by insiders. Comparatively, 5.3% of Silicon Motion Technology shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Power Integrations and Silicon Motion Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Power Integrations 25.83% 22.44% 20.07%
Silicon Motion Technology 21.92% 33.80% 23.83%

Earnings & Valuation

This table compares Power Integrations and Silicon Motion Technology’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Power Integrations $703.28 million 5.61 $164.41 million $3.08 21.97
Silicon Motion Technology $922.10 million 2.51 $200.00 million $6.46 10.84

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

Analyst Recommendations

This is a summary of current recommendations for Power Integrations and Silicon Motion Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Power Integrations 0 0 2 0 3.00
Silicon Motion Technology 0 5 1 0 2.17

Power Integrations presently has a consensus price target of $91.20, indicating a potential upside of 34.79%. Silicon Motion Technology has a consensus price target of $106.17, indicating a potential upside of 51.65%. Given Silicon Motion Technology’s higher possible upside, analysts clearly believe Silicon Motion Technology is more favorable than Power Integrations.

Summary

Power Integrations beats Silicon Motion Technology on 9 of the 17 factors compared between the two stocks.

About Power Integrations

(Get Rating)

Power Integrations, Inc. designs, develops, manufactures, and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion worldwide. The company provides a range of alternating current to direct current power conversion products that address power supply ranging from less than one watt of output to approximately 500 watts of output for mobile-device chargers, consumer appliances, utility meters, LCD monitors, main and standby power supplies for desktop computers and TVs, LED lighting, and various other consumer and industrial applications, as well as power conversion in high-power applications comprising industrial motors, solar and wind-power systems, electric vehicles, and high-voltage DC transmission systems. It also offers high-voltage diodes; high-voltage gate-driver products used to operate high-voltage switches, such as insulated-gate bipolar transistors and silicon-carbide MOSFETs under the SCALE and SCALE-2 product-family names; and SCALE-iDriver for use in powertrain and charging applications for electric vehicles. In addition, the company provides motor-driver ICs for use in refrigerator compressors, ceiling fans, and air purifiers, as well as pumps, fans, and blowers used in consumer appliances, such as dishwashers and laundry machines. It serves communications, computer, consumer, and industrial markets. The company sells its products to original equipment manufacturers and merchant power supply manufacturers through direct sales force, as well as a network of independent sales representatives and distributors. Power Integrations, Inc. was incorporated in 1988 and is headquartered in San Jose, California.

About Silicon Motion Technology

(Get Rating)

Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. It offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the Ferri SSD, Ferri-eMMC, and Ferri-UFS brands. The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, South Korea, China, Malaysia, Singapore, and internationally. Silicon Motion Technology Corporation was founded in 1995 and is based in Hong Kong, Hong Kong.

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