Himax Technologies (HIMX) & STMicroelectronics (NYSE:STM) Financial Review

Himax Technologies (NASDAQ:HIMX) and STMicroelectronics (NYSE:STM) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Profitability

This table compares Himax Technologies and STMicroelectronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Himax Technologies 3.66% 6.12% 3.45%
STMicroelectronics 12.41% 21.97% 12.53%

Institutional and Insider Ownership

22.9% of Himax Technologies shares are owned by institutional investors. Comparatively, 4.1% of STMicroelectronics shares are owned by institutional investors. 31.5% of Himax Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Himax Technologies and STMicroelectronics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Himax Technologies 1 6 3 0 2.20
STMicroelectronics 1 6 4 0 2.27

Himax Technologies currently has a consensus target price of $7.33, suggesting a potential upside of 66.29%. STMicroelectronics has a consensus target price of $20.00, suggesting a potential upside of 35.04%. Given Himax Technologies’ higher probable upside, analysts clearly believe Himax Technologies is more favorable than STMicroelectronics.

Risk and Volatility

Himax Technologies has a beta of -0.27, indicating that its stock price is 127% less volatile than the S&P 500. Comparatively, STMicroelectronics has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Himax Technologies $685.17 million 1.11 $27.96 million $0.16 27.56
STMicroelectronics $8.35 billion 1.59 $802.00 million $0.98 15.11

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

Dividends

Himax Technologies pays an annual dividend of $0.09 per share and has a dividend yield of 2.0%. STMicroelectronics pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. Himax Technologies pays out 56.3% of its earnings in the form of a dividend. STMicroelectronics pays out 20.4% 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.

Summary

STMicroelectronics beats Himax Technologies on 11 of the 16 factors compared between the two stocks.

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. was founded in 2001 and is headquartered in Tainan City, Taiwan.

STMicroelectronics Company Profile

STMicroelectronics N.V., together with its subsidiaries, develops, manufactures, and markets semiconductor products worldwide. It operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments. The company offers a range of products, including discrete and standard commodity components, application-specific integrated circuits, full-custom and semi-custom devices, and application-specific standard products for analog, digital, and mixed-signal applications, as well as silicon chips and smartcards. It also provides subsystems, and assembly and other services. The company sells its products through its distributors and retailers, as well as through sales representatives. STMicroelectronics N.V. was founded in 1987 and is headquartered in Geneva, Switzerland.

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