Power Integrations (NASDAQ:POWI) and Cabot Microelectronics (NASDAQ:CCMP) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.
Risk & Volatility
Power Integrations has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Cabot Microelectronics has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.
99.4% of Power Integrations shares are held by institutional investors. Comparatively, 99.3% of Cabot Microelectronics shares are held by institutional investors. 4.0% of Power Integrations shares are held by insiders. Comparatively, 3.3% of Cabot Microelectronics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Power Integrations and Cabot Microelectronics’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Power Integrations||$431.76 million||4.32||$27.60 million||$2.28||27.90|
|Cabot Microelectronics||$590.12 million||4.14||$110.04 million||$5.22||18.33|
Cabot Microelectronics has higher revenue and earnings than Power Integrations. Cabot Microelectronics is trading at a lower price-to-earnings ratio than Power Integrations, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and target prices for Power Integrations and Cabot Microelectronics, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Power Integrations currently has a consensus target price of $78.50, indicating a potential upside of 23.39%. Cabot Microelectronics has a consensus target price of $121.25, indicating a potential upside of 26.74%. Given Cabot Microelectronics’ stronger consensus rating and higher possible upside, analysts clearly believe Cabot Microelectronics is more favorable than Power Integrations.
This table compares Power Integrations and Cabot Microelectronics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Power Integrations pays an annual dividend of $0.64 per share and has a dividend yield of 1.0%. Cabot Microelectronics pays an annual dividend of $1.60 per share and has a dividend yield of 1.7%. Power Integrations pays out 28.1% of its earnings in the form of a dividend. Cabot Microelectronics pays out 30.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Power Integrations has raised its dividend for 6 consecutive years and Cabot Microelectronics has raised its dividend for 2 consecutive years.
Cabot Microelectronics beats Power Integrations on 11 of the 17 factors compared between the two stocks.
Power Integrations Company Profile
Power Integrations, Inc. designs, develops, and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion. The company offers a range of alternating current to direct current (DC) power conversion products that address power supply ranging from less than 1 watt of output to approximately 500 watts of output for mobile-device chargers, consumer appliances, utility meters, liquid-crystal-display monitors, main and standby power supplies for desktop computers and TVs, light-emitting diode lamps, and other consumer and industrial applications. It also provides high-voltage diodes; and high-voltage gate-driver products under the SCALE and SCALE-2 product-family names. In addition, the company offers monolithic high-voltage DC-DC power conversion ICs designed for use in power-over-Ethernet powered devices, such as voice-over-IP phones and security cameras, as well as network hubs, line cards, servers, digital PBX phones, and DC-DC converter modules and industrial controls. It serves communications, computer, consumer, and industrial markets. The company sells its products to original equipment manufacturers and merchant power supply manufacturers through direct staff, as well as through a network of independent sales representatives and distributors worldwide. Power Integrations, Inc. was founded in 1988 and is headquartered in San Jose, California.
Cabot Microelectronics Company Profile
Cabot Microelectronics Corporation, together with its subsidiaries, develops, manufactures, and sells polishing slurries and pads used in the manufacture of advanced integrated circuit (IC) devices in the semiconductor industry in chemical mechanical planarization (CMP) process. It provides CMP slurries, which are liquid solutions composed of high-purity deionized water, proprietary chemical additives, and engineered abrasives that chemically and mechanically interact with the surface material of the IC device at an atomic level; and CMP pads that are engineered polymeric materials designed to distribute and transport the slurry to the surface of the wafer and distribute it evenly across the wafer. The company's CMP slurries are used for polishing various materials that conduct electrical signals, including tungsten, copper, tantalum, and aluminum; and various materials that are used in the production of rigid disks and magnetic heads for hard disk drives, as well as used in the dielectric insulating materials that separate conductive layers within logic and memory IC devices. It also designs and produces precision polishing and metrology systems to attain near-perfect shape and surface finish on various optical components, such as mirrors, lenses, and prisms. It serves the producers of logic IC devices or memory IC devices, and providers of IC foundry services directly, as well as through distributors. Cabot Microelectronics Corporation was founded in 1999 and is headquartered in Aurora, Illinois.
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