Cree (NASDAQ: CREE) and Semtech (NASDAQ:SMTC) are both mid-cap technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.
Earnings and Valuation
This table compares Cree and Semtech’s revenue, earnings per share and valuation.
||Earnings Per Share
Semtech has lower revenue, but higher earnings than Cree. Cree is trading at a lower price-to-earnings ratio than Semtech, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and recommmendations for Cree and Semtech, as reported by MarketBeat.
||Strong Buy Ratings
Cree currently has a consensus target price of $30.42, indicating a potential downside of 17.13%. Semtech has a consensus target price of $41.90, indicating a potential upside of 27.55%. Given Semtech’s stronger consensus rating and higher probable upside, analysts plainly believe Semtech is more favorable than Cree.
Insider & Institutional Ownership
98.9% of Cree shares are held by institutional investors. Comparatively, 96.0% of Semtech shares are held by institutional investors. 1.1% of Cree shares are held by company insiders. Comparatively, 2.2% of Semtech shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility & Risk
Cree has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Semtech has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500.
This table compares Cree and Semtech’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Semtech beats Cree on 12 of the 14 factors compared between the two stocks.
Cree, Inc. is a manufacturer of lighting-class light emitting diode (LED) products, lighting products and semiconductor products for power and radio-frequency (RF) applications. The Company’s products are focused for applications, such as indoor and outdoor lighting, video displays, transportation, electronic signs and signals, power supplies, inverters and wireless systems. The Company has three segments: Lighting Products, LED Products, and Power and RF Products. The Company’s Lighting Products segment offers LED lighting systems and bulbs. The Company’s LED Products segment offers LED components, LED chips and silicon carbide (SiC) materials. The Company’s Power and RF Products segment offers power devices and RF devices. The Company designs, manufactures and markets lighting systems for indoor and outdoor applications, with a focus on LED lighting systems for the commercial, industrial and consumer markets.
Semtech Corporation is a supplier of analog and mixed-signal semiconductor products. The Company designs, develops and markets a range of products for commercial applications, which are sold into the enterprise computing, communications, consumer and industrial end-markets. Its product lines include Signal Integrity, Protection, Wireless and Sensing, and Power and High-Reliability. Applications for the industrial market include video broadcast studio equipment, automated meter reading, wireless charging, military and aerospace, medical, security systems, automotive, Internet of Things, industrial and home automation, and video security and surveillance. Enterprise computing end-markets include desktops, notebooks, servers, graphic boards, printers, datacenter related equipment and passive optical networks. Communications end-market applications include wireless base stations, carrier networks, switches and routers, cable modems, signal conditioners and wireless local area network.
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