Marvell Technology Group (MRVL) and ON Semiconductor (ON) Critical Analysis

Marvell Technology Group (NASDAQ: ON) and ON Semiconductor (NASDAQ:ON) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Dividends

Marvell Technology Group pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. ON Semiconductor does not pay a dividend. Marvell Technology Group pays out 23.1% of its earnings in the form of a dividend. Marvell Technology Group has increased its dividend for 2 consecutive years.

Profitability

This table compares Marvell Technology Group and ON Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marvell Technology Group 22.24% 13.84% 12.09%
ON Semiconductor 16.66% 24.14% 9.35%

Earnings and Valuation

This table compares Marvell Technology Group and ON Semiconductor’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marvell Technology Group $2.41 billion 4.30 $520.83 million $1.04 19.88
ON Semiconductor $5.54 billion 1.64 $810.70 million $1.46 14.62

ON Semiconductor has higher revenue and earnings than Marvell Technology Group. ON Semiconductor is trading at a lower price-to-earnings ratio than Marvell Technology Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Marvell Technology Group has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, ON Semiconductor has a beta of 2.06, suggesting that its stock price is 106% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Marvell Technology Group and ON Semiconductor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marvell Technology Group 0 4 20 0 2.83
ON Semiconductor 2 6 10 0 2.44

Marvell Technology Group currently has a consensus target price of $26.16, indicating a potential upside of 26.49%. ON Semiconductor has a consensus target price of $25.59, indicating a potential upside of 19.93%. Given Marvell Technology Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe Marvell Technology Group is more favorable than ON Semiconductor.

Insider and Institutional Ownership

91.5% of ON Semiconductor shares are owned by institutional investors. 0.1% of Marvell Technology Group shares are owned by insiders. Comparatively, 1.6% of ON Semiconductor shares are owned by 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

Marvell Technology Group beats ON Semiconductor on 9 of the 17 factors compared between the two stocks.

About Marvell Technology Group

Marvell Technology Group Ltd. designs, develops, and markets analog, mixed-signal, digital signal processing, and embedded and standalone integrated circuits. It offers a range of storage products, including hard disk drive (HDD) and solid-state drive controllers, as well as HDD components, such as HDD preamps components; and develops software-enabled silicon solutions comprising serial advanced technology attachment port multipliers, bridges, serial attached SCSI, and non-volatile memory express redundant array of independent disks controllers and converged storage processors for enterprises, data centers, and cloud computing businesses. The company also provides networking products, which includes Ethernet solutions consisting of Ethernet switches, Ethernet physical-layer transceivers, and single-chip network interface devices; and embedded communication processors. In addition, it offers a portfolio of connectivity solutions, including Wi-Fi and Wi-Fi/Bluetooth integrated system-on-a-chip products, which are integrated into various end devices, including enterprise access points, home gateways, multimedia devices, gaming products, printers, automotive infotainment and telematics units, and smart industrial devices. Further, the company provides printer-specific standard products, as well as full-custom and application-specific integrated circuits; and application processors. It has operations in the United States, China, Malaysia, the Philippines, Thailand, Singapore, India, Israel, Japan, South Korea, Taiwan, and Vietnam. Marvell Technology Group Ltd. was founded in 1995 and is headquartered in Hamilton, Bermuda.

About ON Semiconductor

ON Semiconductor Corporation manufactures and sells semiconductor components for various electronic devices worldwide. It operates through three segments: Power Solutions Group, Analog Solutions Group, and Image Sensor Group. The Power Solutions Group segment offers discrete, module, and integrated semiconductor products for various applications, such as power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference. The Analog Solutions Group segment designs and develops analog, mixed-signal, and logic application specific integrated circuits and standard products, as well as power solutions for a range of end-users in the automotive, consumer, computing, industrial, communications, medical, and aerospace/defense markets. This segment also provides trusted foundry, trusted design, and manufacturing services, as well as integrated passive devices product technology. The Image Sensor Group segment offers complementary metal oxide semiconductors and charge-coupled device image sensors, as well as proximity sensors, image signal processors, and actuator drivers for autofocus and image stabilization for a range of customers in automotive, industrial, consumer, wireless, medical, and aerospace/defense markets. The company serves original equipment manufacturers, distributors, and electronic manufacturing service providers. ON Semiconductor Corporation was founded in 1999 and is headquartered in Phoenix, Arizona.

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