Financial Contrast: Intersil (ISIL) vs. Semtech (SMTC)

Intersil (NASDAQ: ISIL) and Semtech (NASDAQ:SMTC) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.

Insider & Institutional Ownership

93.4% of Intersil shares are held by institutional investors. Comparatively, 94.0% of Semtech shares are held by institutional investors. 1.6% of Intersil shares are held by company insiders. Comparatively, 2.2% of Semtech shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Intersil and Semtech, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Intersil 0 1 0 0 2.00
Semtech 0 2 9 0 2.82

Intersil currently has a consensus target price of $22.50, indicating a potential upside of 0.04%. Semtech has a consensus target price of $41.90, indicating a potential upside of 14.64%. Given Semtech’s stronger consensus rating and higher probable upside, analysts clearly believe Semtech is more favorable than Intersil.

Profitability

This table compares Intersil and Semtech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Intersil 13.67% 7.83% 6.57%
Semtech 7.79% 12.13% 7.38%

Earnings and Valuation

This table compares Intersil and Semtech’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Intersil N/A N/A N/A $0.35 64.26
Semtech $544.27 million 4.46 $54.66 million $0.68 53.75

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

Dividends

Intersil pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. Semtech does not pay a dividend. Intersil pays out 137.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Semtech beats Intersil on 10 of the 13 factors compared between the two stocks.

About Intersil

Intersil Corporation is engaged in designing and developing power management and precision analog integrated circuits (IC). The Company provides power management and precision analog technology for applications in the infrastructure, industrial, automotive, military, aerospace, computing, and consumer markets. It supplies a range of power IC solutions for battery management, processor power management and display power management, including power regulators, converters and controllers, as well as integrated power modules. It also provides precision analog components, such as amplifiers and buffers, proximity and light sensors, data converters, optoelectronics, video decoders and interface products. It is also a supplier of radiation-hardened devices to the military and aerospace industries. It operates in approximately two market categories, including industrial and infrastructure, and computing and consumer.

About Semtech

Semtech Corporation is a supplier of analog and mixed-signal semiconductor products. The Company designs, develops and markets a range of products for commercial applications, which are sold into the enterprise computing, communications, consumer and industrial end-markets. Its product lines include Signal Integrity, Protection, Wireless and Sensing, and Power and High-Reliability. Applications for the industrial market include video broadcast studio equipment, automated meter reading, wireless charging, military and aerospace, medical, security systems, automotive, Internet of Things, industrial and home automation, and video security and surveillance. Enterprise computing end-markets include desktops, notebooks, servers, graphic boards, printers, datacenter related equipment and passive optical networks. Communications end-market applications include wireless base stations, carrier networks, switches and routers, cable modems, signal conditioners and wireless local area network.

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