Comparing NVE (NASDAQ:NVEC) and United Microelectronics (NYSE:UMC)

NVE (NASDAQ:NVEC) and United Microelectronics (NYSE:UMC) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Dividends

NVE pays an annual dividend of $4.00 per share and has a dividend yield of 6.0%. United Microelectronics pays an annual dividend of $0.37 per share and has a dividend yield of 5.1%. NVE pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United Microelectronics pays out 75.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares NVE and United Microelectronics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NVE	$25.88 million	12.53	$15.06 million	$3.00	22.33
United Microelectronics	$7.09 billion	2.57	$1.49 billion	$0.49	14.81

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

Insider and Institutional Ownership

66.0% of NVE shares are held by institutional investors. Comparatively, 5.1% of United Microelectronics shares are held by institutional investors. 1.9% of NVE shares are held by insiders. Comparatively, 8.0% of United Microelectronics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for NVE and United Microelectronics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NVE	0	0	0	0	0.00
United Microelectronics	1	3	0	1	2.20

United Microelectronics has a consensus price target of $7.40, indicating a potential upside of 2.00%. Given United Microelectronics’ stronger consensus rating and higher probable upside, analysts plainly believe United Microelectronics is more favorable than NVE.

Volatility and Risk

NVE has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, United Microelectronics has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Profitability

This table compares NVE and United Microelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NVE	57.71%	23.16%	22.52%
United Microelectronics	16.71%	11.05%	7.15%

Summary

NVE beats United Microelectronics on 9 of the 16 factors compared between the two stocks.

About NVE

NVE Corporation develops and sells devices that use spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information in the United States and internationally. The company manufactures spintronic products, including sensors and couplers for use in acquiring and transmitting data. Its products comprise standard sensors to detect the presence of a magnetic or metallic material to determine position, rotation, or speed for the factory automation market; and custom and medical sensors for medical devices to replace electromechanical magnetic switches. The company also offers spintronic couplers for power conversion and industrial Internet of Things (IIoT) market; and DC-to-DC convertors for use in power conversion systems and industrial networks for the IIoT. In addition, it undertakes contracts for research and development, and licensing of spintronic magnetoresistive random access memory technology. NVE Corporation was founded in 1989 and is headquartered in Eden Prairie, Minnesota.

About United Microelectronics

United Microelectronics Corporation operates as a semiconductor wafer foundry in Taiwan, China, Hong Kong, Japan, Korea, the United States, Europe, and internationally. The company provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. It serves fabless design companies and integrated device manufacturers. United Microelectronics Corporation was incorporated in 1980 and is headquartered in Hsinchu City, Taiwan.