Reviewing Integrated Device Technology (NASDAQ:IDTI) and NVIDIA (NASDAQ:NVDA)

Integrated Device Technology (NASDAQ:IDTI) and NVIDIA (NASDAQ:NVDA) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Dividends

NVIDIA pays an annual dividend of $0.64 per share and has a dividend yield of 0.4%. Integrated Device Technology does not pay a dividend. NVIDIA pays out 10.5% of its earnings in the form of a dividend. NVIDIA has increased its dividend for 6 consecutive years.

Profitability

This table compares Integrated Device Technology and NVIDIA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Integrated Device Technology 11.68% 30.02% 14.31%
NVIDIA 30.68% 31.27% 21.67%

Institutional and Insider Ownership

91.3% of Integrated Device Technology shares are held by institutional investors. Comparatively, 67.5% of NVIDIA shares are held by institutional investors. 1.2% of Integrated Device Technology shares are held by insiders. Comparatively, 4.6% of NVIDIA shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Integrated Device Technology has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, NVIDIA has a beta of 2.07, indicating that its share price is 107% more volatile than the S&P 500.

Earnings and Valuation

This table compares Integrated Device Technology and NVIDIA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Integrated Device Technology $842.76 million 7.52 -$12.13 million $1.27 38.57
NVIDIA $11.72 billion 7.92 $4.14 billion $6.07 25.10

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Integrated Device Technology and NVIDIA, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Integrated Device Technology 0 9 0 0 2.00
NVIDIA 3 12 26 0 2.56

Integrated Device Technology presently has a consensus target price of $45.57, indicating a potential downside of 6.98%. NVIDIA has a consensus target price of $194.71, indicating a potential upside of 27.80%. Given NVIDIA’s stronger consensus rating and higher possible upside, analysts clearly believe NVIDIA is more favorable than Integrated Device Technology.

Summary

NVIDIA beats Integrated Device Technology on 14 of the 17 factors compared between the two stocks.

About Integrated Device Technology

Integrated Device Technology, Inc. designs, develops, manufactures, and markets a range of semiconductor solutions for the communications, computing, consumer, automotive, industrial, and industrial end-markets. It operates in two segments, Communications; and Computing, Consumer and Industrial. The Communications segment offers clocks and timing solutions; radio frequency products; flow-control management products, including multi-port products; telecommunication interface products; static random access memory products; first in and first out memories; digital logic products; optical interconnect and frequency control solutions; and Serial RapidIO switching solutions. The Computing, Consumer and Industrial segment provides clock generation and distribution products; programmable timing devices; computing timing solutions; high-performance server memory interfaces; wireless power products; PCI Express products; signal integrity products; power management integrated circuits; video distribution and contribution solutions; sensor signal conditioners; and optical interconnect solutions, as well as sensing products for mobile, automotive, and industrial solutions. The company markets its products primarily to original equipment manufacturers through various channels, including direct sales, distributors, electronic manufacturing suppliers, and independent sales representatives. Integrated Device Technology, Inc. was founded in 1980 and is headquartered in San Jose, California.

About NVIDIA

NVIDIA Corp. engages in the design and manufacture of computer graphics processors, chipsets, and related multimedia software. It operates through the Graphics Processing Unit (GPU) and Tegra Processor segments. The GPU segment comprises of product brands which aims specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. The and Tegra Processor segment integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for autonomous robots, drones, and cars, as well as for consoles and mobile gaming and entertainment devices. The company was founded by Jen-Hsun Huang, Chris A. Malachowsky, and Curtis R. Priem in January 1993 and is headquartered in Santa Clara, CA.

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