Financial Survey: POET Technologies (NASDAQ:POET) vs. Microchip Technology (NASDAQ:MCHP)

POET Technologies (NASDAQ:POET) and Microchip Technology (NASDAQ:MCHP) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for POET Technologies and Microchip Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
POET Technologies	0	0	2	1	3.33
Microchip Technology	1	4	14	0	2.68

POET Technologies currently has a consensus target price of $6.25, suggesting a potential downside of 6.44%. Microchip Technology has a consensus target price of $89.63, suggesting a potential upside of 56.97%. Given Microchip Technology’s higher probable upside, analysts clearly believe Microchip Technology is more favorable than POET Technologies.

Risk & Volatility

POET Technologies has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, Microchip Technology has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500.

Valuation & Earnings

This table compares POET Technologies and Microchip Technology”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
POET Technologies	$119,946.00	4,259.69	-$20.27 million	($0.59)	-11.32
Microchip Technology	$5.50 billion	5.58	$1.91 billion	$1.43	39.93

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

Insider & Institutional Ownership

2.0% of POET Technologies shares are owned by institutional investors. Comparatively, 91.5% of Microchip Technology shares are owned by institutional investors. 0.5% of POET Technologies shares are owned by insiders. Comparatively, 2.1% of Microchip Technology shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares POET Technologies and Microchip Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
POET Technologies	N/A	-194.16%	-132.32%
Microchip Technology	14.22%	19.47%	8.10%

Summary

Microchip Technology beats POET Technologies on 12 of the 15 factors compared between the two stocks.

About POET Technologies

POET Technologies Inc. designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. It offers integration solutions based on the POET Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques. It also develops photonic integrated components. The company serves the data center, telecommunications, Internet of things and industrial sensing, automotive LIDAR, optical coherence tomography for medical devices, and virtual reality systems markets. The company was formerly known as Opel Technologies Inc. and changed its name to POET Technologies Inc. in June 2013. POET Technologies Inc. was incorporated in 1972 and is headquartered in Toronto, Canada.

About Microchip Technology

Microchip Technology Incorporated engages in the development, manufacture, and sale of smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia. The company offers general purpose 8-bit, 16-bit, and 32-bit mixed-signal microcontrollers; 32-bit embedded mixed-signal microprocessors; and specialized microcontrollers for automotive, industrial, computing, communications, lighting, power supplies, motor control, human machine interface, security, wired connectivity, and wireless connectivity applications. It also provides analog, interface, mixed signal, and timing products comprising power management, linear, mixed-signal, high-voltage, thermal management, discrete diodes, and metal oxide semiconductor field effect transistors (MOSFETS), radio frequency (RF), drivers, safety, security, timing, USB, Ethernet, wireless, and other interface products; field-programmable gate array (FPGA) products; and application development tools that enable system designers to program microcontroller, FPGA, and microprocessor products for specific applications. In addition, the company offers serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, serial static random access memories, and serial electrically erasable random access memories for the production of very small footprint devices; and licenses its SuperFlash embedded flash and non-volatile memory technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate array, RF, analog, and neuromorphic compute products that require embedded non-volatile memory, as well as provides engineering services. Further, it offers wafer foundry and assembly, and test subcontracting manufacturing services; and timing systems products, application specific integrated circuits, and aerospace products. The company was incorporated in 1989 and is headquartered in Chandler, Arizona.