Head-To-Head Contrast: Semiconductor Manufacturing Int’l (NYSE:SMI) and Finisar (NYSE:FNSR)

Semiconductor Manufacturing Int’l (NYSE:SMI) and Finisar (NASDAQ:FNSR) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Institutional and Insider Ownership

0.5% of Semiconductor Manufacturing Int’l shares are owned by institutional investors. Comparatively, 96.6% of Finisar shares are owned by institutional investors. 1.1% of Finisar 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.

Earnings & Valuation

This table compares Semiconductor Manufacturing Int’l and Finisar’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Semiconductor Manufacturing Int’l $3.36 billion 308.73 $134.05 million $0.15 7,433.33
Finisar $1.28 billion 2.14 -$53.22 million $0.59 38.76

Semiconductor Manufacturing Int’l has higher revenue and earnings than Finisar. Finisar is trading at a lower price-to-earnings ratio than Semiconductor Manufacturing Int’l, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Semiconductor Manufacturing Int’l has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Finisar has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Semiconductor Manufacturing Int’l and Finisar, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Semiconductor Manufacturing Int’l 2 1 0 0 1.33
Finisar 0 12 2 0 2.14

Finisar has a consensus target price of $25.48, suggesting a potential upside of 11.42%. Given Finisar’s stronger consensus rating and higher possible upside, analysts clearly believe Finisar is more favorable than Semiconductor Manufacturing Int’l.

Profitability

This table compares Semiconductor Manufacturing Int’l and Finisar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Semiconductor Manufacturing Int’l 2.82% 1.08% 0.65%
Finisar -4.16% 4.22% 2.74%

Summary

Finisar beats Semiconductor Manufacturing Int’l on 9 of the 14 factors compared between the two stocks.

About Semiconductor Manufacturing Int’l

Semiconductor Manufacturing International Corporation, an investment holding company, engages in the computer-aided design, manufacture, testing, packaging, and trading of integrated circuits (IC) and other semiconductor services. The company offers various types of semiconductors, including logic, mixed-signal and radio frequency, power IC, microprocessor, memory related, optoelectronics, other sensors, discrete, and others. It also provides integrated solutions, such as design support services; libraries and intellectual property services; mask-making services; and wafer probing, bumping, assembling, and testing services. In addition, the company designs and manufactures semiconductor masks and solar cells related semiconductor products; and offers marketing related services. It operates in the United States, Europe, and the Asia Pacific. Semiconductor Manufacturing International Corporation was founded in 2000 and is headquartered in Shanghai, the People's Republic of China.

About Finisar

Finisar Corporation provides components and subsystems to networking equipment manufacturers, data center operators, telecom service providers, consumer electronics, and automotive companies in the United States, China, Malaysia, and internationally. The company's optical subsystems primarily include transmitters, receivers, transceivers, transponders, and active optical cables, which provide the fundamental optical-electrical or optoelectronic interface for interconnecting the electronic equipment used in wireline networks comprising switches, routers, and servers, as well as wireless networks, such as antennas and base stations. It also offers wavelength selective switches that are used to switch network traffic from one optical fiber to various other fibers without converting to an electronic signal. In addition, the company provides packaged laser, receivers, and photodetectors for data communication and telecommunication applications; and passive optical components for telecommunication applications. It markets its products through direct sales force, as well as distributors, manufacturers' representatives and resellers, and system integrators; and to the manufacturers of storage systems and telecommunication equipment, as well as to their contract manufacturers. Finisar Corporation was founded in 1987 and is headquartered in Sunnyvale, California.

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