Analyzing STMicroelectronics (NYSE:STM) & SemiLEDs (NASDAQ:LEDS)

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

Insider & Institutional Ownership

5.1% of STMicroelectronics shares are held by institutional investors. Comparatively, 76.3% of SemiLEDs shares are held by institutional investors. 52.1% of SemiLEDs shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STMicroelectronics	$14.23 billion	1.72	$4.21 billion	$2.43	11.17
SemiLEDs	$5.31 million	1.90	-$2.69 million	($0.47)	-2.98

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

Risk and Volatility

STMicroelectronics has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, SemiLEDs has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
STMicroelectronics	16.11%	13.29%	9.19%
SemiLEDs	-44.37%	-120.86%	-18.80%

Analyst Recommendations

This is a breakdown of current recommendations for STMicroelectronics and SemiLEDs, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STMicroelectronics	1	3	7	1	2.67
SemiLEDs	0	0	0	0	0.00

STMicroelectronics presently has a consensus price target of $37.63, suggesting a potential upside of 38.61%. Given STMicroelectronics’ stronger consensus rating and higher possible upside, equities research analysts plainly believe STMicroelectronics is more favorable than SemiLEDs.

Summary

STMicroelectronics beats SemiLEDs on 12 of the 15 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 SemiLEDs

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips, LED components, and LED modules and systems in the United States, Taiwan, the Netherlands, Germany, Japan, and internationally. The company also sells enhanced vertical, LED product series in blue, white, green, and UV; LED chips to packagers or distributors; and lighting products primarily to original design manufacturers of lighting products and the end-users of lighting devices, as well as packs and sells its LED chips. Its products are used for general lighting applications, including commercial, industrial, and residential lighting; and specialty industrial applications, such as ultraviolet or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, germicidal and viricidal devices LED lighting for horticulture applications, architectural lighting, and entertainment lighting. The company was incorporated in 2005 and is based in Chu-Nan, Taiwan.