Head-To-Head Review: Silicon Motion Technology (NASDAQ:SIMO) & CSP (NASDAQ:CSPI)

CSP (NASDAQ:CSPI) and Silicon Motion Technology (NASDAQ:SIMO) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CSP	-2.78%	-3.35%	-2.35%
Silicon Motion Technology	10.36%	10.14%	7.76%

Analyst Recommendations

This is a summary of recent recommendations and price targets for CSP and Silicon Motion Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CSP	0	0	0	0	0.00
Silicon Motion Technology	0	0	10	0	3.00

Silicon Motion Technology has a consensus price target of $87.78, suggesting a potential downside of 1.07%. Given Silicon Motion Technology’s stronger consensus rating and higher possible upside, analysts plainly believe Silicon Motion Technology is more favorable than CSP.

Dividends

CSP pays an annual dividend of $0.12 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 2.2%. CSP pays out -70.6% of its earnings in the form of a dividend. Silicon Motion Technology pays out 84.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CSP has raised its dividend for 2 consecutive years.

Volatility & Risk

CSP has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, Silicon Motion Technology has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Institutional & Insider Ownership

26.7% of CSP shares are owned by institutional investors. Comparatively, 78.0% of Silicon Motion Technology shares are owned by institutional investors. 16.6% of CSP shares are owned by insiders. Comparatively, 5.3% of Silicon Motion Technology shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares CSP and Silicon Motion Technology”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CSP	$55.22 million	2.00	-$330,000.00	($0.17)	-65.88
Silicon Motion Technology	$803.55 million	3.75	$89.25 million	$2.37	37.44

Silicon Motion Technology has higher revenue and earnings than CSP. CSP 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 CSP on 14 of the 17 factors compared between the two stocks.

About CSP

CSP Inc. develops and markets IT integration solutions, security products, managed IT services, cloud services, purpose-built network adapters, and cluster computer systems for commercial and defense customers worldwide. It operates in two segments, Technology Solutions and High Performance Products. The Technology Solutions segment provides third-party computer hardware and software as a value-added reseller to various customers in web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries. This segment also offers professional IT consulting services, such as planning, designing, assessment, implementation, migration, optimization, and project management; storage and virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; and IT security compliance services. In addition, this segment provides unified communications, wireless, and routing and switching solutions; custom software applications and solutions development and support services; optimization, maintenance, and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT, as well as IT security support tasks. Further, this segment offers managed and cloud services, such as proactive monitoring and remote management of IT infrastructure, managed and hosted unified communication services, security, and backup and replication. The High Performance Products segment offers ARIA Software-Defined Security, a cybersecurity solution; ARIA Zero Trust PROTECT that stopping the attacks that are used to attack critical infrastructure applications; Myricom network adapters; and multicomputer products for digital signal processing applications in the defense markets. CSP Inc. was incorporated in 1968 and is headquartered in Lowell, Massachusetts.

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.