STMicroelectronics (NYSE:STM) versus SiTime (NASDAQ:SITM) Critical Analysis

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

Profitability

This table compares STMicroelectronics and SiTime’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STMicroelectronics	19.68%	18.18%	12.52%
SiTime	-60.46%	-10.53%	-8.40%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for STMicroelectronics and SiTime, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STMicroelectronics	0	4	7	0	2.64
SiTime	0	1	3	0	2.75

STMicroelectronics currently has a consensus price target of $43.13, suggesting a potential upside of 40.77%. SiTime has a consensus price target of $130.00, suggesting a potential downside of 7.02%. Given STMicroelectronics’ higher probable upside, analysts plainly believe STMicroelectronics is more favorable than SiTime.

Institutional & Insider Ownership

5.1% of STMicroelectronics shares are owned by institutional investors. Comparatively, 84.3% of SiTime shares are owned by institutional investors. 2.3% of SiTime shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

STMicroelectronics has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500. Comparatively, SiTime has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500.

Valuation and Earnings

This table compares STMicroelectronics and SiTime’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STMicroelectronics	$15.41 billion	1.80	$4.21 billion	$3.90	7.86
SiTime	$143.99 million	22.46	-$80.54 million	($4.13)	-33.85

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

Summary

STMicroelectronics beats SiTime on 9 of the 14 factors compared between the two stocks.

About STMicroelectronics

STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments. The Automotive and Discrete Group segment offers automotive integrated circuits (ICs), and discrete and power transistor products. The Analog, MEMS and Sensors Group segment provides industrial application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs); general purpose analog products; custom analog ICs; wireless charging solutions; galvanic isolated gate drivers; low and high voltage amplifiers, comparators, and current-sense amplifiers; MasterGaN, a solution that integrates a silicon driver and GaN power transistors in a single package; wireline and wireless connectivity ICs; touch screen controllers; micro-electro-mechanical systems (MEMS) products, including sensors or actuators; and optical sensing solutions. The Microcontrollers and Digital ICs Group segment offers general purpose and secure microcontrollers; and radio frequency (RF) products. It also offers application-specific standard products for analog, digital and mixed-signal applications. In addition, the company provides assembly and other services. It sells its products through distributors and retailers, as well as through sales representatives. The company serves automotive, industrial, personal electronics and communications equipment, and computers and peripherals markets. STMicroelectronics N.V. was incorporated in 1987 and is headquartered in Geneva, Switzerland.

About SiTime

SiTime Corporation designs, develops, and sells silicon timing systems solutions in Taiwan, Hong Kong, the United States, Singapore, and internationally. The company provides resonators and clock integrated circuits, and various types of oscillators. It serves various markets, including communications, datacenter, enterprise, automotive, industrial, internet of things, mobile, consumer, and aerospace and defense. The company sells its products directly to customers, distributors, and resellers. SiTime Corporation was incorporated in 2003 and is based in Santa Clara, California.