Head to Head Review: Siliconware Precision Industries (SPIL) and Monolithic Power Systems (MPWR)

Siliconware Precision Industries (NASDAQ: SPIL) and Monolithic Power Systems (NASDAQ:MPWR) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Siliconware Precision Industries and Monolithic Power Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Siliconware Precision Industries 0 0 0 0 N/A
Monolithic Power Systems 0 0 7 0 3.00

Monolithic Power Systems has a consensus target price of $127.71, suggesting a potential upside of 14.85%. Given Monolithic Power Systems’ higher probable upside, analysts clearly believe Monolithic Power Systems is more favorable than Siliconware Precision Industries.

Dividends

Siliconware Precision Industries pays an annual dividend of $0.21 per share and has a dividend yield of 2.5%. Monolithic Power Systems pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Siliconware Precision Industries pays out 58.3% of its earnings in the form of a dividend. Monolithic Power Systems pays out 49.7% 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.

Volatility and Risk

Siliconware Precision Industries has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Monolithic Power Systems has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Insider & Institutional Ownership

2.7% of Siliconware Precision Industries shares are held by institutional investors. Comparatively, 93.9% of Monolithic Power Systems shares are held by institutional investors. 14.3% of Siliconware Precision Industries shares are held by company insiders. Comparatively, 4.0% of Monolithic Power Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Siliconware Precision Industries and Monolithic Power Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Siliconware Precision Industries 9.79% 12.42% 6.68%
Monolithic Power Systems 15.66% 15.40% 12.91%

Valuation and Earnings

This table compares Siliconware Precision Industries and Monolithic Power Systems’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Siliconware Precision Industries $2.64 billion 1.95 $302.68 million $0.36 22.92
Monolithic Power Systems $388.67 million 11.88 $52.72 million $1.61 69.07

Siliconware Precision Industries has higher revenue and earnings than Monolithic Power Systems. Siliconware Precision Industries is trading at a lower price-to-earnings ratio than Monolithic Power Systems, indicating that it is currently the more affordable of the two stocks.

Summary

Monolithic Power Systems beats Siliconware Precision Industries on 11 of the 15 factors compared between the two stocks.

Siliconware Precision Industries Company Profile

Siliconware Precision Industries Co., Ltd. is a Taiwan-based company mainly engaged in the provision of packaging and testing services of integrated circuits (ICs) and related products. The Company’s businesses include the manufacture, processing, assembly, testing and importing and exporting of ICs, transistors, light emitting diode (LED) digital displays, LED lights, liquid crystal display (LCD) clock cores, phototransistors, synthesis circuits, as well as thin film circuits and thick film circuits. The Company’s packaging businesses focus on IC products, including plastic small size ICs and plastic square planar ICs, among others. Its testing businesses mainly include final testing businesses and system level testing businesses, among others.

Monolithic Power Systems Company Profile

Monolithic Power Systems, Inc. designs, develops and markets integrated power semiconductor solutions and power delivery architectures. The Company operates in the design, development, marketing and sale of power solutions for the communications, storage and computing, consumer and industrial markets segment. The Company’s product families include Direct Current (DC) to DC Products, and Lighting Control Products. The Company’s DC to DC integrated circuits (ICs) are used to convert and control voltages within a range of electronic systems, such as portable electronic devices, wireless local area network (LAN) access points, computers, monitors, automobiles and medical equipment. Lighting control ICs are used in backlighting and general illumination products. In addition to Alternating Current (AC)/DC offline solutions for lighting illumination applications, the Company also offers AC/DC power conversion solutions for end products that plug into a wall outlet.

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