Canadian Solar (CSIQ) vs. Himax (HIMX) Critical Analysis

Canadian Solar (NASDAQ: CSIQ) and Himax (NASDAQ:HIMX) are both small-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Canadian Solar and Himax, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Canadian Solar 2 6 2 0 2.00
Himax 3 5 6 0 2.21

Canadian Solar currently has a consensus target price of $17.40, suggesting a potential upside of 39.87%. Himax has a consensus target price of $10.43, suggesting a potential upside of 42.14%. Given Himax’s stronger consensus rating and higher probable upside, analysts plainly believe Himax is more favorable than Canadian Solar.

Insider & Institutional Ownership

39.1% of Canadian Solar shares are owned by institutional investors. Comparatively, 24.0% of Himax shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Himax pays an annual dividend of $0.23 per share and has a dividend yield of 3.1%. Canadian Solar does not pay a dividend. Himax pays out 143.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Canadian Solar and Himax’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Canadian Solar $3.39 billion 0.21 $99.57 million $1.04 11.96
Himax $685.17 million 1.84 $27.96 million $0.16 45.88

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

Profitability

This table compares Canadian Solar and Himax’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Canadian Solar 3.78% 10.51% 1.90%
Himax 3.43% 5.53% 3.16%

Volatility and Risk

Canadian Solar has a beta of 2.66, indicating that its stock price is 166% more volatile than the S&P 500. Comparatively, Himax has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500.

Summary

Canadian Solar beats Himax on 8 of the 15 factors compared between the two stocks.

About Canadian Solar

Canadian Solar Inc., together with its subsidiaries, designs, develops, manufactures, and sells solar ingots, wafers, cells, modules, and other solar power products primarily under the Canadian Solar brand name. The company operates through two segments, Module and System Solutions, and Energy. Its products include various solar modules that are used in residential, commercial, and industrial solar power generation systems. The company also provides specialty solar products consisting of Andes Solar Home System, an off-grid solar system that provides an economical source of electricity to homes and communities without access to grid; and Maple Solar System, a clean energy solution for families, as well as solar system kits, which are a ready-to-install packages that consist inverters, racking systems, and other accessories. In addition, it develops, builds, and sells solar power projects; performs engineering, procurement, and construction (EPC) work for solar power projects; and offers operation and maintenance services that include inspection, repair, and replacement of plant equipment, site management, and administrative support services. Further, the company generates and sells electricity through its solar plants with an aggregate capacity of approximately 1,211.1 megawatts. Canadian Solar Inc. offers its products to distributors, system integrators, project developers, and installers/EPC companies. The company has operations in North America, South America, Europe, Africa, the Middle East, Australia, and Asia. Canadian Solar Inc. was founded in 2001 and is based in Guelph, Canada.

About Himax

Himax Technologies, Inc., a fabless semiconductor company, provides display imaging processing technologies worldwide. The company operates in two segments, Driver IC and Non-Driver Products. It offers display driver integrated circuits (ICs) and timing controllers used in televisions (TVs), laptops, monitors, mobile phones, tablets, digital cameras, car navigation, and other consumer electronics devices. The company also designs and provides controllers for touch sensor displays; in-cell touch and display driver integration single-chip solutions; LED driver and power management ICs; scaler products for monitors and projectors; tailor-made video processing IC solutions; silicon IPs; and liquid crystal on silicon micro-displays for augmented reality (AR) devices and head-up displays for automotive industry. In addition, it offers digital camera solutions, including complementary metal oxide semiconductor image sensors and wafer level optics for AR devices, 3D sensing, and machine vision, which are used in various applications, such as mobile phone, tablet, laptop, TV, PC camera, automobile, security, medical devices, and Internet on Things. The company markets its display drivers and display-related products to panel manufacturers, agents or distributors, module manufacturers, and assembly houses; and non-driver products to camera module manufacturers, optical engine manufacturers, and television system manufacturers. Himax Technologies, Inc. was founded in 2001 and is headquartered in Tainan City, Taiwan.

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