Comparing ARM (NASDAQ:ARM) & United Microelectronics (NYSE:UMC)

United Microelectronics (NYSE:UMC) and ARM (NASDAQ:ARM) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Profitability

This table compares United Microelectronics and ARM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Microelectronics	23.90%	14.80%	9.41%
ARM	12.12%	18.97%	13.23%

Insider & Institutional Ownership

5.1% of United Microelectronics shares are held by institutional investors. Comparatively, 7.5% of ARM shares are held by institutional investors. 8.0% of United Microelectronics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for United Microelectronics and ARM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Microelectronics	0	1	2	0	2.67
ARM	1	10	17	2	2.67

United Microelectronics presently has a consensus target price of $8.90, indicating a potential upside of 1.95%. ARM has a consensus target price of $125.96, indicating a potential downside of 13.48%. Given United Microelectronics’ higher probable upside, equities analysts clearly believe United Microelectronics is more favorable than ARM.

Valuation & Earnings

This table compares United Microelectronics and ARM”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Microelectronics	$223.46 billion	0.10	$1.95 billion	$0.70	12.47
ARM	$3.50 billion	43.62	$306.00 million	N/A	N/A

United Microelectronics has higher revenue and earnings than ARM.

Summary

ARM beats United Microelectronics on 7 of the 12 factors compared between the two stocks.

About United Microelectronics

United Microelectronics Corporation operates as a semiconductor wafer foundry in Taiwan, Singapore, China, Hong Kong, Japan, the United States, Europe, and internationally. The company provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. It serves fabless design companies and integrated device manufacturers. The company was incorporated in 1980 and is headquartered in Hsinchu City, Taiwan.

About ARM

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.