Critical Analysis: Silicon Motion Technology (NASDAQ:SIMO) vs. Himax Technologies (NASDAQ:HIMX)

Silicon Motion Technology (NASDAQ:SIMO) and Himax Technologies (NASDAQ:HIMX) are both small-cap computer and technology 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.

Valuation and Earnings

This table compares Silicon Motion Technology and Himax Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Silicon Motion Technology $530.35 million 3.41 $98.07 million $3.41 14.69
Himax Technologies $723.60 million 0.89 $8.57 million $0.06 62.50

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

Profitability

This table compares Silicon Motion Technology and Himax Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silicon Motion Technology 13.16% 13.22% 10.75%
Himax Technologies -0.90% -1.15% -0.59%

Analyst Ratings

This is a summary of current ratings and recommmendations for Silicon Motion Technology and Himax Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silicon Motion Technology 1 4 5 0 2.40
Himax Technologies 0 4 0 0 2.00

Silicon Motion Technology currently has a consensus target price of $52.38, suggesting a potential upside of 4.54%. Himax Technologies has a consensus target price of $2.81, suggesting a potential downside of 25.00%. Given Silicon Motion Technology’s stronger consensus rating and higher probable upside, research analysts plainly believe Silicon Motion Technology is more favorable than Himax Technologies.

Risk & Volatility

Silicon Motion Technology has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Himax Technologies has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.

Insider & Institutional Ownership

69.9% of Silicon Motion Technology shares are held by institutional investors. Comparatively, 6.8% of Himax Technologies shares are held by institutional investors. 31.5% of Himax Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Silicon Motion Technology beats Himax Technologies on 12 of the 14 factors compared between the two stocks.

Silicon Motion Technology Company Profile

Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets semiconductor solutions for the mobile and enterprise storage, and mobile communications markets worldwide. It offers embedded storage and expandable storage products, including NAND flash controllers, such as embedded multimediacard (eMMC), universal flash storage, client solid-state drive (SSD), secure digital card, flash memory card controller, and universal serial bus flash drive controller products. The company also provides specialty storage solutions, such as customized enterprise-grade peripheral component interconnect express SSDs; and industrial-grade and commercial-grade single-chip SSDs. In addition, it offers specialty radio frequency integrated circuits (RF ICs), such as mobile TV system-on-chips (SoCs) and low power WiFi SoCs. The company's products are used in smartphones, tablets, digital cameras, camcorders, and desktop and notebook PCs, as well as in industrial, enterprise, commercial, and other applications. It offers its controllers under the SMI brand; enterprise-grade SSDs under the Shannon brand; single-chip industrial-grade SSDs under the Ferri SSD and Ferri-eMMC brands; RF ICs under the FCI brand; and software-defined storage products under the Bigtera brand. The company markets and sells its products through direct sales personnel and independent electronics distributors to flash manufacturers, original equipment manufacturers, and module makers. Silicon Motion Technology Corporation was founded in 1995 and is based in Kowloon, Hong Kong.

Himax Technologies Company Profile

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. has a collaboration with Kneron to develop and commercialize a 3D sensing and AI-enabled security and surveillance solution. The company was founded in 2001 and is headquartered in Tainan City, Taiwan.

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