Comparing Magnachip Semiconductor (NYSE:MX) and GLOBALFOUNDRIES (NASDAQ:GFS)

Magnachip Semiconductor (NYSE:MX) and GLOBALFOUNDRIES (NASDAQ:GFS) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Volatility & Risk

Magnachip Semiconductor has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, GLOBALFOUNDRIES has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500.

Profitability

This table compares Magnachip Semiconductor and GLOBALFOUNDRIES’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnachip Semiconductor	-11.49%	-9.29%	-7.60%
GLOBALFOUNDRIES	18.47%	14.78%	8.64%

Analyst Recommendations

This is a breakdown of current recommendations for Magnachip Semiconductor and GLOBALFOUNDRIES, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnachip Semiconductor	0	1	2	0	2.67
GLOBALFOUNDRIES	0	1	14	0	2.93

Magnachip Semiconductor currently has a consensus price target of $24.33, suggesting a potential upside of 261.03%. GLOBALFOUNDRIES has a consensus price target of $74.50, suggesting a potential upside of 32.30%. Given Magnachip Semiconductor’s higher probable upside, analysts clearly believe Magnachip Semiconductor is more favorable than GLOBALFOUNDRIES.

Valuation and Earnings

This table compares Magnachip Semiconductor and GLOBALFOUNDRIES’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnachip Semiconductor	$337.66 million	0.77	-$8.04 million	($0.64)	-10.53
GLOBALFOUNDRIES	$8.11 billion	3.80	$1.45 billion	$2.55	22.08

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

Institutional and Insider Ownership

73.5% of Magnachip Semiconductor shares are held by institutional investors. Comparatively, 14.8% of GLOBALFOUNDRIES shares are held by institutional investors. 4.5% of Magnachip Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

GLOBALFOUNDRIES beats Magnachip Semiconductor on 11 of the 14 factors compared between the two stocks.

About Magnachip Semiconductor

Magnachip Semiconductor Corporation, together with its subsidiaries, designs, manufactures, and supplies analog and mixed-signal semiconductor platform solutions for communications, the Internet of Things, consumer, industrial, and automotive applications. It provides display solutions, including source and gate drivers, and timing controllers that cover a range of flat panel displays used in mobile communications, automotive, entertainment devices, notebook PCs, monitors and liquid crystal displays, and micro light-emitting diode (LED) televisions. The company also offers metal oxide semiconductor field-effect transistors, insulated-gate bipolar transistors, AC-DC converters, DC-DC converters, LED drivers, regulators, and power management integrated circuits for a range of devices comprising televisions, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, and other consumer electronics, as well as for power suppliers, e-bike, photovoltaic inverter, LED lighting, and motor drive; and organic light-emitting diode display driver integrated circuits for OLED TVs. It serves consumer, computing, and industrial electronics original equipment manufacturers, original design manufacturers, and electronics manufacturing services companies, as well as subsystem designers in Korea, the Asia Pacific, the United States, Europe, and internationally. The company sells its products through a direct sales force, as well as through a network of agents and distributors. Magnachip Semiconductor Corporation was incorporated in 2003 and is based in Cheongju, South Korea.

About GLOBALFOUNDRIES

GLOBALFOUNDRIES Inc. operates as a semiconductor foundry worldwide. The company manufactures a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units; and offers mainstream wafer fabrication services and technologies. The company was founded in 2009 and is based in Malta, New York.