Critical Analysis: Sunedison Semiconductor (NASDAQ:SEMI) and Cypress Semiconductor (CY)

Cypress Semiconductor (NASDAQ: CY) and Sunedison Semiconductor (NASDAQ:SEMI) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Analyst Recommendations

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This is a summary of current recommendations for Cypress Semiconductor and Sunedison Semiconductor, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cypress Semiconductor 1 3 9 0 2.62
Sunedison Semiconductor 0 0 0 0 N/A

Cypress Semiconductor presently has a consensus price target of $19.21, indicating a potential upside of 17.91%. Given Cypress Semiconductor’s higher probable upside, equities research analysts clearly believe Cypress Semiconductor is more favorable than Sunedison Semiconductor.

Dividends

Cypress Semiconductor pays an annual dividend of $0.44 per share and has a dividend yield of 2.7%. Sunedison Semiconductor does not pay a dividend. Cypress Semiconductor pays out 73.3% of its earnings in the form of a dividend.

Profitability

This table compares Cypress Semiconductor and Sunedison Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cypress Semiconductor -4.02% 12.48% 6.22%
Sunedison Semiconductor -13.19% -24.50% -10.80%

Earnings & Valuation

This table compares Cypress Semiconductor and Sunedison Semiconductor’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cypress Semiconductor $2.33 billion 2.51 -$80.91 million $0.60 27.15
Sunedison Semiconductor N/A N/A N/A N/A N/A

Sunedison Semiconductor has lower revenue, but higher earnings than Cypress Semiconductor.

Institutional and Insider Ownership

85.8% of Cypress Semiconductor shares are held by institutional investors. Comparatively, 63.0% of Sunedison Semiconductor shares are held by institutional investors. 0.7% of Cypress Semiconductor shares are held by company insiders. Comparatively, 1.9% of Sunedison Semiconductor shares are held 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.

Summary

Cypress Semiconductor beats Sunedison Semiconductor on 8 of the 10 factors compared between the two stocks.

About Cypress Semiconductor

Cypress Semiconductor Corporation manufactures embedded system solutions for automotive, industrial, home automation and appliances, consumer electronics and medical products. The Company’s segments include Microcontroller and Connectivity Division (MCD), and Memory Products Division (MPD). MCD focuses on microcontroller (MCU), analog and wireless and wired connectivity solutions. MPD focuses on parallel and serial NOR flash memories, NAND flash memories, static random access memory (SRAM), ferroelectric-random access memory (F-RAM) ferroelectric memory devices and other specialty memories. The Company’s products include Traveo MCUs and Flexible MCUs; PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP; CapSense, and TrueTouch Analog Power Management integrated circuits (PMICs) and energy harvesting solutions.

About Sunedison Semiconductor

SunEdison Semiconductor Limited is engaged in the development, manufacture and sale of silicon wafers to the semiconductor industry. The Company also develops advanced substrates, such as epitaxial (EPI) wafers and wafers for the silicon-on-insulator (SOI) market, which enable computing and communications applications. Its products include polished wafers, EPI wafers and SOI wafers. The Company sells its products to the semiconductor manufacturers around the world, including integrated device manufacturers, pure-play semiconductor foundries and companies that specialize in wafer customization. It operates facilities in semiconductor manufacturing regions throughout the world, including Taiwan, Malaysia, South Korea, Italy, Japan, and the United States. Its wafers are used as the base substrate for the manufacture of various types of semiconductor devices, including microprocessors, memory, analog, mixed-signal and radio frequency (RF) integrated circuits, discrete and image sensors.

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