Allegro MicroSystems (NASDAQ:ALGM – Get Free Report) and Amkor Technology (NASDAQ:AMKR – Get Free Report) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.
Risk & Volatility
Allegro MicroSystems has a beta of 1.9, meaning that its stock price is 90% more volatile than the S&P 500. Comparatively, Amkor Technology has a beta of 2.2, meaning that its stock price is 120% more volatile than the S&P 500.
Valuation and Earnings
This table compares Allegro MicroSystems and Amkor Technology”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Allegro MicroSystems | $890.10 million | 9.86 | -$14.90 million | ($0.09) | -523.56 |
| Amkor Technology | $6.71 billion | 2.33 | $373.89 million | $1.75 | 36.01 |
Amkor Technology has higher revenue and earnings than Allegro MicroSystems. Allegro MicroSystems is trading at a lower price-to-earnings ratio than Amkor Technology, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Allegro MicroSystems and Amkor Technology’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Allegro MicroSystems | -1.67% | 6.09% | 4.11% |
| Amkor Technology | 6.17% | 9.88% | 5.40% |
Insider and Institutional Ownership
56.5% of Allegro MicroSystems shares are held by institutional investors. Comparatively, 42.8% of Amkor Technology shares are held by institutional investors. 0.5% of Allegro MicroSystems shares are held by insiders. Comparatively, 26.4% of Amkor Technology shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Allegro MicroSystems and Amkor Technology, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Allegro MicroSystems | 1 | 1 | 10 | 0 | 2.75 |
| Amkor Technology | 0 | 7 | 4 | 0 | 2.36 |
Allegro MicroSystems presently has a consensus price target of $55.20, suggesting a potential upside of 17.15%. Amkor Technology has a consensus price target of $69.88, suggesting a potential upside of 10.88%. Given Allegro MicroSystems’ stronger consensus rating and higher possible upside, analysts plainly believe Allegro MicroSystems is more favorable than Amkor Technology.
Summary
Amkor Technology beats Allegro MicroSystems on 9 of the 14 factors compared between the two stocks.
About Allegro MicroSystems
Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.
About Amkor Technology
Amkor Technology, Inc. provides outsourced semiconductor packaging and test services in the United States, Japan, Europe, the Middle East, Africa, and the Asia Pacific. It offers turnkey packaging and test services, including semiconductor wafer bump, wafer probe, wafer back-grind, package design, packaging, system-level and final test, and drop shipment services; flip chip scale package products for smartphones, tablets, and other mobile consumer electronic devices; flip chip stacked chip scale packages that are used to stack memory digital baseband, and as applications processors in mobile devices; flip-chip ball grid array packages for various networking, storage, computing, automotive, and consumer applications; and memory products for system memory or platform data storage. The company also provides wafer-level CSP packages for power management, transceivers, sensors, wireless charging, codecs, radar, and specialty silicon; wafer-level fan-out packages used in power management, transceivers, radar, and specialty silicon; silicon wafer integrated fan-out technology that replaces a laminate substrate with a thinner structure; leadframe packages for electronic devices and mixed-signal applications; and substrate-based wirebond packages used to connect a die to a substrate. In addition, it offers micro-electro-mechanical systems packages that are miniaturized mechanical and electromechanical devices; and advanced system-in-package modules used in radio frequency and front end modules, basebands, connectivity, fingerprint sensors, display and touch screen drivers, sensors and MEMS, and NAND memory and solid-state drives. Further, the company provides wafer, package, and system level test services, as well as burn-in test and test development services. It serves integrated device manufacturers, fabless semiconductor companies, original equipment manufacturers, and contract foundries. The company was founded in 1968 and is headquartered in Tempe, Arizona.
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