Comparing CEVA (NASDAQ:CEVA) & Broadcom (NASDAQ:AVGO)

CEVA (NASDAQ:CEVA) and Broadcom (NASDAQ:AVGO) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for CEVA and Broadcom, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CEVA 0 4 2 0 2.33
Broadcom 0 9 25 0 2.74

CEVA currently has a consensus target price of $31.25, indicating a potential downside of 4.78%. Broadcom has a consensus target price of $310.47, indicating a potential upside of 6.94%. Given Broadcom’s stronger consensus rating and higher probable upside, analysts plainly believe Broadcom is more favorable than CEVA.

Insider and Institutional Ownership

83.6% of CEVA shares are held by institutional investors. Comparatively, 84.6% of Broadcom shares are held by institutional investors. 3.8% of CEVA shares are held by insiders. Comparatively, 3.3% of Broadcom 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.

Volatility and Risk

CEVA has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500. Comparatively, Broadcom has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Profitability

This table compares CEVA and Broadcom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CEVA 1.33% 1.12% 0.98%
Broadcom 15.92% 32.81% 13.40%

Valuation & Earnings

This table compares CEVA and Broadcom’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CEVA $77.88 million 9.26 $570,000.00 $0.11 298.36
Broadcom $20.85 billion 5.54 $12.26 billion $18.83 15.42

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

Dividends

Broadcom pays an annual dividend of $10.60 per share and has a dividend yield of 3.7%. CEVA does not pay a dividend. Broadcom pays out 56.3% of its earnings in the form of a dividend. Broadcom has increased its dividend for 9 consecutive years.

Summary

Broadcom beats CEVA on 12 of the 17 factors compared between the two stocks.

CEVA Company Profile

CEVA, Inc. licenses signal processing platforms and artificial intelligence processors for semiconductor companies and original equipment manufacturers (OEMs) serving the mobile, consumer, automotive, industrial, and Internet-of-Things (IoT) markets worldwide. The company licenses a family of signal processing intellectual properties (IPs), including platforms for 5G baseband processing in handsets and base station RAN; integrated cellular IoT solutions; digital signal processor (DSP) platforms incorporating voice input algorithms and software for voice enabled devices; and DSP platforms for advanced imaging and computer vision in various camera-enabled devices, as well as a family of self-contained artificial intelligent (AI) processors that address a range of edge applications. The company also provides IPs for Bluetooth and Wi-Fi platforms. Its technologies are licensed to companies, which design, manufacture, market, and sell application-specific integrated circuits and application-specific standard products to wireless, consumer electronics, and automotive companies for incorporation into various end products. The company delivers its DSP cores, platforms, and AI processors in the form of a hardware description language definition; and offers development platforms, software development kits, and software debug tools that facilitate system design, debug, and software development. CEVA, Inc. licenses its technology through a direct sales force. The company was formerly known as ParthusCeva, Inc. and changed its name to CEVA, Inc. in December 2003. CEVA, Inc. was founded in 1999 and is headquartered in Mountain View, California.

Broadcom Company Profile

Broadcom Inc. designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. The Wired Infrastructure segment provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; Ethernet switching and routing application specific standard products; embedded processors and controllers; serializer/deserializer application specific integrated circuits; optical and copper, and physical layers; and fiber optic laser and receiver components. The Wireless Communications segment offers RF front end modules, filters, and power amplifiers; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; and custom touch controllers. The Enterprise Storage segment provides serial attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express switches; fiber channel host bus adapters and switches; read channel based SoCs; custom flash controllers; and preamplifiers. The Industrial & Other segment offers optocouplers, industrial fiber optics, motion control encoders and subsystems, and light emitting diodes. The company's products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. is headquartered in San Jose, California.

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