Silicon Motion Technology (NASDAQ:SIMO – Get Free Report) and Hewlett Packard Enterprise (NYSE:HPE – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Analyst Ratings
This is a summary of current ratings and price targets for Silicon Motion Technology and Hewlett Packard Enterprise, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Silicon Motion Technology | 0 | 0 | 10 | 0 | 3.00 |
| Hewlett Packard Enterprise | 0 | 9 | 7 | 1 | 2.53 |
Silicon Motion Technology currently has a consensus target price of $83.89, suggesting a potential upside of 14.41%. Hewlett Packard Enterprise has a consensus target price of $22.71, suggesting a potential upside of 7.70%. Given Silicon Motion Technology’s stronger consensus rating and higher probable upside, analysts clearly believe Silicon Motion Technology is more favorable than Hewlett Packard Enterprise.
Risk & Volatility
Profitability
This table compares Silicon Motion Technology and Hewlett Packard Enterprise’s 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% |
| Hewlett Packard Enterprise | 4.60% | 9.59% | 3.41% |
Insider and Institutional Ownership
78.0% of Silicon Motion Technology shares are held by institutional investors. Comparatively, 80.8% of Hewlett Packard Enterprise shares are held by institutional investors. 5.3% of Silicon Motion Technology shares are held by insiders. Comparatively, 0.4% of Hewlett Packard Enterprise shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Dividends
Silicon Motion Technology pays an annual dividend of $1.99 per share and has a dividend yield of 2.7%. Hewlett Packard Enterprise pays an annual dividend of $0.52 per share and has a dividend yield of 2.5%. Silicon Motion Technology pays out 71.3% of its earnings in the form of a dividend. Hewlett Packard Enterprise pays out 52.5% 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. Hewlett Packard Enterprise has increased its dividend for 2 consecutive years.
Valuation and Earnings
This table compares Silicon Motion Technology and Hewlett Packard Enterprise”s revenue, earnings per share (EPS) 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 |
| Hewlett Packard Enterprise | $30.13 billion | 0.92 | $2.58 billion | $0.99 | 21.30 |
Hewlett Packard Enterprise has higher revenue and earnings than Silicon Motion Technology. Hewlett Packard Enterprise is trading at a lower price-to-earnings ratio than Silicon Motion Technology, indicating that it is currently the more affordable of the two stocks.
Summary
Silicon Motion Technology beats Hewlett Packard Enterprise on 11 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 Hewlett Packard Enterprise
Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data seamlessly in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. It operates in six segments: Compute, HPC & AI, Storage, Intelligent Edge, Financial Services, and Corporate Investments and Other. The company offers general purpose servers for multi-workload computing and workload-optimized servers; HPE ProLiant rack and tower servers; HPE Synergy; HPE Alletra, HPE GreenLake, Zerto, HPE InfoSight, and HPE CloudPhysics storage products; HPE Cray EX, HPE Cray XD, and converged edge systems; and HPE Superdome Flex, HPE Nonstop, and HPE Integrity products. It also provides HPE Aruba products that includes hardware products, such as Wi-Fi access points, switches, and gateways; HPE Aruba Networking software and services comprising cloud-based management, network management and access control, analytics and assurance, software-defined wide-area networking, network security, analytics and assurance, and location services software; and professional and support services, as well as as-a-service and consumption models. In addition, the company offers leasing, financing, IT consumption, and utility programs and asset management services for customers to facilitate technology deployment models and the acquisition of various IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others; consultative-led services; HPE Ezmeral Container Platform; HPE Ezmeral Software Container Platform and HPE Ezmeral Software Data Fabric; OpsRamp; and Hewlett Packard Labs. It serves commercial and large enterprise groups, such as business and public sector enterprises; and through various partners comprising resellers, distribution partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. The company was founded in 1939 and is headquartered in Spring, Texas.
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