Silicon Motion Technology (NASDAQ:SIMO – Get Free Report) and International Business Machines (NYSE:IBM – Get Free Report) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.
Dividends
Silicon Motion Technology pays an annual dividend of $1.99 per share and has a dividend yield of 2.7%. International Business Machines pays an annual dividend of $6.72 per share and has a dividend yield of 2.3%. Silicon Motion Technology pays out 71.3% of its earnings in the form of a dividend. International Business Machines pays out 115.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. International Business Machines has raised its dividend for 30 consecutive years. Silicon Motion Technology is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
78.0% of Silicon Motion Technology shares are held by institutional investors. Comparatively, 59.0% of International Business Machines shares are held by institutional investors. 5.3% of Silicon Motion Technology shares are held by insiders. Comparatively, 0.2% of International Business Machines shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Analyst Recommendations
This is a summary of current ratings and price targets for Silicon Motion Technology and International Business Machines, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Silicon Motion Technology | 0 | 0 | 10 | 0 | 3.00 |
| International Business Machines | 1 | 8 | 8 | 2 | 2.58 |
Silicon Motion Technology currently has a consensus price target of $83.89, indicating a potential upside of 14.41%. International Business Machines has a consensus price target of $266.19, indicating a potential downside of 6.94%. Given Silicon Motion Technology’s stronger consensus rating and higher possible upside, analysts clearly believe Silicon Motion Technology is more favorable than International Business Machines.
Profitability
This table compares Silicon Motion Technology and International Business Machines’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Silicon Motion Technology | 12.06% | 12.00% | 9.18% |
| International Business Machines | 8.71% | 37.43% | 7.00% |
Earnings & Valuation
This table compares Silicon Motion Technology and International Business Machines”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Silicon Motion Technology | $803.55 million | 3.10 | $89.25 million | $2.79 | 26.28 |
| International Business Machines | $62.75 billion | 4.24 | $6.02 billion | $5.81 | 49.23 |
International Business Machines has higher revenue and earnings than Silicon Motion Technology. Silicon Motion Technology is trading at a lower price-to-earnings ratio than International Business Machines, indicating that it is currently the more affordable of the two stocks.
Summary
Silicon Motion Technology beats International Business Machines on 10 of the 18 factors compared between the two stocks.
About Silicon Motion Technology
Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. The company 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 FerriSSD, 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, Korea, China, Malaysia, Singapore, and internationally. The company was founded in 1995 and is based in Hong Kong, Hong Kong.
About International Business Machines
International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.
Receive News & Ratings for Silicon Motion Technology Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Silicon Motion Technology and related companies with MarketBeat.com's FREE daily email newsletter.
