Reviewing Xperi (XPER) & STR (STRI)

Xperi (NASDAQ: XPER) and STR (OTCMKTS:STRI) are both small-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Earnings & Valuation

This table compares Xperi and STR’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Xperi $259.57 million 3.94 $56.08 million ($1.44) -14.41
STR $20.11 million 0.29 -$15.87 million ($0.61) -0.49

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

Profitability

This table compares Xperi and STR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xperi -22.54% 8.10% 3.38%
STR -63.78% -28.89% -24.24%

Dividends

Xperi pays an annual dividend of $0.80 per share and has a dividend yield of 3.9%. STR does not pay a dividend. Xperi pays out -55.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and target prices for Xperi and STR, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xperi 0 1 1 0 2.50
STR 0 0 0 0 N/A

Xperi presently has a consensus price target of $53.00, suggesting a potential upside of 155.42%. Given Xperi’s higher possible upside, equities research analysts clearly believe Xperi is more favorable than STR.

Institutional & Insider Ownership

99.6% of Xperi shares are held by institutional investors. Comparatively, 0.0% of STR shares are held by institutional investors. 2.4% of Xperi shares are held by insiders. Comparatively, 10.3% of STR 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.

Risk and Volatility

Xperi has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, STR has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500.

Summary

Xperi beats STR on 12 of the 14 factors compared between the two stocks.

About Xperi

Tessera Holding Corporation is a product and technology licensing company. The Company’s technologies and intellectual property are deployed, in areas, such as audio, computational imaging, computer vision, mobile computing and communications, memory, data storage, three dimensional (3D) semiconductor interconnect and packaging. The Company delivers smart sight and sound solutions, and 3D semiconductor interconnect solutions for mobile devices, consumer electronics, and automotive markets. The Company also addresses technologies, such as Internet of Things (IoT) and augmented reality/virtual reality (AR/VR). It offers audio solutions for mobile devices, home theater systems and cinema. The Company’s subsidiaries include Tessera Technologies, Inc., DTS, Inc., Invensas Corporation and FotoNation.

About STR

STR Holdings, Inc. is a holding company. The Company is a provider of encapsulants to the solar industry. Encapsulant is a component used to protect solar cells and hold solar modules together. The Company has developed ethylene-vinyl acetate (EVA)-based encapsulants for use in commercial solar module manufacturing. The Company’s encapsulant formulations offer a range of properties and processing attributes, including various curing times and temperatures that align with the requirements of its customers’ individual lamination processes and module constructions. The Company’s formulations can be used in both crystalline silicon and thin-film modules. The Company operates production facilities in Llanera, Asturias, Spain and Shajiabang, Changshu, Jiangsu Province, China. It has a total annual production capacity of approximately 5.1 gigawatts. Its customers are solar module manufacturers located mainly in North America, Europe and Asia.

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