Critical Analysis: NVE (NASDAQ:NVEC) & Rohm (OTCMKTS:ROHCY)

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

Profitability

This table compares Rohm and NVE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rohm	-29.85%	4.39%	2.70%
NVE	57.64%	30.53%	29.54%

Dividends

Rohm pays an annual dividend of $0.18 per share and has a dividend yield of 0.6%. NVE pays an annual dividend of $4.00 per share and has a dividend yield of 3.8%. Rohm pays out -7.0% of its earnings in the form of a dividend. NVE pays out 107.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

Rohm has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, NVE has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500.

Earnings and Valuation

This table compares Rohm and NVE”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rohm	$3.20 billion	3.81	-$1.05 billion	($2.57)	-12.26
NVE	$26.33 million	19.60	$15.20 million	$3.72	28.66

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Rohm and NVE, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rohm	0	1	1	0	2.50
NVE	0	0	1	0	3.00

Insider & Institutional Ownership

65.9% of NVE shares are owned by institutional investors. 2.1% of NVE shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

NVE beats Rohm on 12 of the 14 factors compared between the two stocks.

About Rohm

ROHM Co., Ltd. manufactures and sells electronic components worldwide. The company operates through three segments: LSI, Semiconductor Devices, and Modules. It provides ICs comprising memory, amplifiers and linear, power management, motor/actuator drivers, resistors, clocks and timers, switches and multiplexers, logic, data converters, sensors and MEMS, display drivers, interfaces, wireless LSIs, audio and video products, speech synthesis LSI, and microcontrollers. The company also offers discrete semiconductor products, such as MOSFETs, bipolar transistors, and diodes; power devices, including power transistors and diodes, SiC power devices, IGBT, and IPM; modules, including optical modules, wireless communication modules, wireless charger modules, and print heads; and opto devices comprising LEDs, LED displays, laser diodes, and optical sensors, as well as foundry services, including thin-film piezoelectric MEMS, wafers, and WL-CSP. Its products are used in industry, automotive, consumer electronics, and telecommunications applications. The company was incorporated in 1940 and is headquartered in Kyoto, Japan.

About NVE

NVE Corporation develops and sells devices that use spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information in the United States and internationally. The company manufactures spintronic products, including sensors and couplers for use in acquiring and transmitting data. Its products comprise standard sensors to detect the presence of a magnetic or metallic material to determine position, rotation, or speed for the factory automation market; and custom and medical sensors for medical devices to replace electromechanical magnetic switches. The company also offers spintronic couplers for power conversion and industrial Internet of Things (IIoT) market; and DC-to-DC convertors for use in power conversion systems and industrial networks for the IIoT. In addition, it undertakes contracts for research and development, and licensing of spintronic magnetoresistive random access memory technology. NVE Corporation was founded in 1989 and is headquartered in Eden Prairie, Minnesota.