Critical Contrast: Applied Micro Circuits (AMCC) and Silicon Motion Technology (SIMO)

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

Earnings & Valuation

This table compares Silicon Motion Technology and Applied Micro Circuits’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Silicon Motion Technology $556.15 million 3.45 $110.94 million $2.54 21.39
Applied Micro Circuits N/A N/A N/A ($0.38) -22.24

Silicon Motion Technology has higher revenue and earnings than Applied Micro Circuits. Applied Micro Circuits 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.

Insider and Institutional Ownership

82.8% of Silicon Motion Technology shares are owned by institutional investors. Comparatively, 73.3% of Applied Micro Circuits shares are owned by institutional investors. 12.4% of Applied Micro Circuits shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Silicon Motion Technology and Applied Micro Circuits’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silicon Motion Technology 17.18% 19.58% 14.98%
Applied Micro Circuits -11.11% -16.63% -13.04%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Silicon Motion Technology and Applied Micro Circuits, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silicon Motion Technology 0 3 10 0 2.77
Applied Micro Circuits 0 0 0 0 N/A

Silicon Motion Technology currently has a consensus price target of $57.67, indicating a potential upside of 6.12%. Given Silicon Motion Technology’s higher probable upside, analysts clearly believe Silicon Motion Technology is more favorable than Applied Micro Circuits.

Dividends

Silicon Motion Technology pays an annual dividend of $0.89 per share and has a dividend yield of 1.6%. Applied Micro Circuits does not pay a dividend. Silicon Motion Technology pays out 35.0% of its earnings in the form of a dividend.

Summary

Silicon Motion Technology beats Applied Micro Circuits on 9 of the 11 factors compared between the two stocks.

About Silicon Motion Technology

Silicon Motion Technology Corporation is a fabless semiconductor company. The Company designs, develops and markets low-power semiconductor solutions to original equipment manufacturers (OEMs) and other customers in the mobile storage and mobile communications markets. It is engaged in developing negative-AND (NAND) flash controller integrated circuits (ICs) for solid-state storage devices and specialty radio frequency (RF) ICs for mobile devices. In the mobile storage market, the Company’s products are controllers used in embedded storage products, such as Solid State Drives (SSDs), and Embedded Multimedia Cards (eMMCs), as well as expandable storage products, such as flash memory cards and universal serial bus (USB) flash drives. For the mobile communications market, the Company’s products are handset transceivers and mobile television (TV) System on Chips (SoCs). The Company’s products are used in devices, such as smartphones, tablets and personal computers (PCs).

About Applied Micro Circuits

Applied Micro Circuits Corporation (AMCC) provides silicon solutions for cloud infrastructure and data centers, as well as connectivity products for edge, metro and long haul communications equipment. The Company’s products serve Computing and Connectivity markets. Its Computing products include the X-Gene family of server processors, based on the ARMv8 64-bit Instruction Set Architecture (ISA), which target mainstream cloud and data center infrastructure, including hyperscale, telco, enterprise and high performance computing. It also offers embedded computing products, which include HeliX family of processors, based on the ARM 64-bit ISA and its PowerPC products, based on Power Architecture. Its embedded Computing products are deployed in various applications, including networking and telecom, enterprise storage and industrial applications. The Connectivity business includes X-Weave family of products for service providers and public cloud, private cloud and enterprise data centers.

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