Micrel (MCRL) versus Mellanox Technologies (MLNX) Head to Head Comparison

Mellanox Technologies (NASDAQ: MLNX) and Micrel (NASDAQ:MCRL) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

60.9% of Mellanox Technologies shares are held by institutional investors. 6.1% of Mellanox Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Mellanox Technologies and Micrel’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mellanox Technologies $863.89 million 3.64 -$19.42 million ($0.39) -158.21
Micrel N/A N/A N/A $0.24 57.75

Micrel has lower revenue, but higher earnings than Mellanox Technologies. Mellanox Technologies is trading at a lower price-to-earnings ratio than Micrel, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mellanox Technologies and Micrel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mellanox Technologies -2.25% 4.81% 3.31%
Micrel 4.70% 4.92% 3.94%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Mellanox Technologies and Micrel, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mellanox Technologies 1 7 6 0 2.36
Micrel 0 0 0 0 N/A

Mellanox Technologies presently has a consensus price target of $66.80, suggesting a potential upside of 8.27%. Given Mellanox Technologies’ higher probable upside, research analysts clearly believe Mellanox Technologies is more favorable than Micrel.

Volatility and Risk

Mellanox Technologies has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Micrel has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Summary

Micrel beats Mellanox Technologies on 6 of the 11 factors compared between the two stocks.

About Mellanox Technologies

Mellanox Technologies, Ltd. is a fabless semiconductor company. The Company is an integrated supplier of interconnect products and solutions based on the InfiniBand and Ethernet standards. The Company operates in the development, manufacturing, marketing and sales of interconnect products segment. Its products facilitate data transmission between servers, storage systems, communications infrastructure equipment and other embedded systems. It operates its business globally and offers products to customers at various levels of integration. The products it offers include integrated circuits (ICs), adapter cards, switch systems, multi-core and network processors, cables, modules, software, services and accessories. Together these products form a networking solution, focused on computing, storage and communication applications used in multiple markets, including high-performance computing (HPC), cloud, Web 2.0, storage, financial services, and enterprise data center (EDC).

About Micrel

Micrel, Incorporated designs, develops, manufactures, and markets a range of high-performance analog, power and mixed-signal integrated circuits (ICs). The Company’s products address a range of markets, including industrial and automotive, wireline communications, enterprise and cloud infrastructure and mobility. It also manufactures custom analog and mixed-signal circuits and provides wafer foundry services for customers which produce electronic systems utilizing semiconductor manufacturing processes, as well as micro-electrical mechanical system (MEMS) technologies. Its offers a linear and power management product portfolio for the networking and communications infrastructure markets, including cloud and enterprise servers, network switches and routers, storage area networks, wireless base stations, and the Internet of Everything. In addition, it offers products that serve the solid state drive market and are seeing strength in the emergence of solid state drives.

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