STMicroelectronics (NYSE:STM) & NVIDIA (NASDAQ:NVDA) Critical Survey

NVIDIA (NASDAQ:NVDA) and STMicroelectronics (NYSE:STM) are both large-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Risk & Volatility

NVIDIA has a beta of 2.12, meaning that its stock price is 112% more volatile than the S&P 500. Comparatively, STMicroelectronics has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500.

Dividends

NVIDIA pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. STMicroelectronics pays an annual dividend of $0.31 per share and has a dividend yield of 1.1%. NVIDIA pays out 1.3% of its earnings in the form of a dividend. STMicroelectronics pays out 26.3% 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. NVIDIA has raised its dividend for 1 consecutive years.

Profitability

This table compares NVIDIA and STMicroelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NVIDIA	51.69%	105.09%	72.19%
STMicroelectronics	8.94%	6.28%	4.43%

Valuation and Earnings

This table compares NVIDIA and STMicroelectronics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NVIDIA	$130.50 billion	26.89	$72.88 billion	$3.10	46.40
STMicroelectronics	$13.27 billion	1.94	$1.56 billion	$1.18	24.27

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

Insider & Institutional Ownership

65.3% of NVIDIA shares are owned by institutional investors. Comparatively, 5.1% of STMicroelectronics shares are owned by institutional investors. 4.2% of NVIDIA shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for NVIDIA and STMicroelectronics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NVIDIA	1	4	35	3	2.93
STMicroelectronics	1	8	4	1	2.36

NVIDIA currently has a consensus price target of $173.05, suggesting a potential upside of 20.32%. STMicroelectronics has a consensus price target of $29.67, suggesting a potential upside of 3.61%. Given NVIDIA’s stronger consensus rating and higher probable upside, research analysts plainly believe NVIDIA is more favorable than STMicroelectronics.

Summary

NVIDIA beats STMicroelectronics on 17 of the 18 factors compared between the two stocks.

About NVIDIA

NVIDIA Corporation provides graphics and compute and networking solutions in the United States, Taiwan, China, Hong Kong, and internationally. The Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU or vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building and operating metaverse and 3D internet applications. The Compute & Networking segment comprises Data Center computing platforms and end-to-end networking platforms, including Quantum for InfiniBand and Spectrum for Ethernet; NVIDIA DRIVE automated-driving platform and automotive development agreements; Jetson robotics and other embedded platforms; NVIDIA AI Enterprise and other software; and DGX Cloud software and services. The company's products are used in gaming, professional visualization, data center, and automotive markets. It sells its products to original equipment manufacturers, original device manufacturers, system integrators and distributors, independent software vendors, cloud service providers, consumer internet companies, add-in board manufacturers, distributors, automotive manufacturers and tier-1 automotive suppliers, and other ecosystem participants. NVIDIA Corporation was incorporated in 1993 and is headquartered in Santa Clara, California.

About STMicroelectronics

STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments. The Automotive and Discrete Group segment offers automotive integrated circuits (ICs), and discrete and power transistor products. The Analog, MEMS and Sensors Group segment provides industrial application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs); general purpose analog products; custom analog ICs; wireless charging solutions; galvanic isolated gate drivers; low and high voltage amplifiers, comparators, and current-sense amplifiers; MasterGaN, a solution that integrates a silicon driver and GaN power transistors in a single package; wireline and wireless connectivity ICs; touch screen controllers; micro-electro-mechanical systems (MEMS) products, including sensors or actuators; and optical sensing solutions. The Microcontrollers and Digital ICs Group segment offers general purpose and secure microcontrollers; and radio frequency (RF) products. It also offers application-specific standard products for analog, digital and mixed-signal applications. In addition, the company provides assembly and other services. It sells its products through distributors and retailers, as well as through sales representatives. The company serves automotive, industrial, personal electronics and communications equipment, and computers and peripherals markets. STMicroelectronics N.V. was incorporated in 1987 and is headquartered in Geneva, Switzerland.