Critical Contrast: Monolithic Power Systems (MPWR) & Himax Technologies (HIMX)

Himax Technologies (NASDAQ: HIMX) and Monolithic Power Systems (NASDAQ:MPWR) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Earnings & Valuation

This table compares Himax Technologies and Monolithic Power Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Himax Technologies $802.92 million 1.78 $50.91 million $0.06 138.17
Monolithic Power Systems $470.93 million 9.71 $65.20 million $1.49 73.77

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

Institutional and Insider Ownership

27.3% of Himax Technologies shares are owned by institutional investors. Comparatively, 92.3% of Monolithic Power Systems shares are owned by institutional investors. 4.0% of Monolithic Power Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Himax Technologies pays an annual dividend of $0.23 per share and has a dividend yield of 2.8%. Monolithic Power Systems pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Himax Technologies pays out 383.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Monolithic Power Systems pays out 53.7% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Himax Technologies and Monolithic Power Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Himax Technologies 3 2 9 0 2.43
Monolithic Power Systems 0 0 7 0 3.00

Himax Technologies currently has a consensus target price of $10.52, suggesting a potential upside of 26.86%. Monolithic Power Systems has a consensus target price of $127.71, suggesting a potential upside of 16.20%. Given Himax Technologies’ higher possible upside, equities research analysts plainly believe Himax Technologies is more favorable than Monolithic Power Systems.

Profitability

This table compares Himax Technologies and Monolithic Power Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Himax Technologies 1.25% 2.10% 1.24%
Monolithic Power Systems 13.85% 16.51% 13.65%

Risk and Volatility

Himax Technologies has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, Monolithic Power Systems has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.

Summary

Monolithic Power Systems beats Himax Technologies on 11 of the 16 factors compared between the two stocks.

About Himax Technologies

Himax Technologies, Inc. is a fabless semiconductor solution provider. The Company is engaged in display driver integrated circuits (IC) and timing controllers used in televisions, laptops, monitors, mobile phones, tablets, digital cameras, car navigation and other consumer electronics devices. The Company operates through two segments: Driver IC and Non-driver products. In addition, the Company designs and provides controllers for touch sensor displays, liquid crystal on silicon micro-displays used in palm-size projectors and head-mounted displays, light-emitting diode driver ICs, power management ICs, scaler products for monitors and projectors, video processing IC solutions and silicon IPs. It also offers digital camera solutions, including complementary metal-oxide-semiconductor image sensors and wafer level optics, which are used in a range of applications, such as mobile phone, tablet, laptop, televisions, personal computer camera, automobile, security and medical devices.

About Monolithic Power Systems

Monolithic Power Systems, Inc. designs, develops and markets integrated power semiconductor solutions and power delivery architectures. The Company operates in the design, development, marketing and sale of power solutions for the communications, storage and computing, consumer and industrial markets segment. The Company’s product families include Direct Current (DC) to DC Products, and Lighting Control Products. The Company’s DC to DC integrated circuits (ICs) are used to convert and control voltages within a range of electronic systems, such as portable electronic devices, wireless local area network (LAN) access points, computers, monitors, automobiles and medical equipment. Lighting control ICs are used in backlighting and general illumination products. In addition to Alternating Current (AC)/DC offline solutions for lighting illumination applications, the Company also offers AC/DC power conversion solutions for end products that plug into a wall outlet.

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