Chipmos Technologies (NASDAQ: IMOS) and FormFactor (NASDAQ:FORM) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

16.4% of Chipmos Technologies shares are held by institutional investors. Comparatively, 84.4% of FormFactor shares are held by institutional investors. 2.3% of FormFactor shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Chipmos Technologies and FormFactor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chipmos Technologies 19.18% 9.42% 4.96%
FormFactor 3.68% 16.80% 11.20%

Dividends

Chipmos Technologies pays an annual dividend of $0.46 per share and has a dividend yield of 2.6%. FormFactor does not pay a dividend. Chipmos Technologies pays out 17.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and price targets for Chipmos Technologies and FormFactor, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chipmos Technologies 0 0 0 0 N/A
FormFactor 0 1 4 1 3.00

FormFactor has a consensus target price of $19.07, suggesting a potential upside of 15.91%. Given FormFactor’s higher probable upside, analysts clearly believe FormFactor is more favorable than Chipmos Technologies.

Risk and Volatility

Chipmos Technologies has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500. Comparatively, FormFactor has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.

Earnings & Valuation

This table compares Chipmos Technologies and FormFactor’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chipmos Technologies $567.50 million 1.33 $43.24 million $2.64 6.66
FormFactor $383.88 million 3.13 -$6.55 million $0.26 63.27

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

Summary

FormFactor beats Chipmos Technologies on 11 of the 16 factors compared between the two stocks.

About Chipmos Technologies

ChipMOS TECHNOLOGIES INC is a Taiwan-based company principally engaged in the integrated circuits packaging and testing business. The Company mainly provides thin small outline packaging (TSOP), fine-pitch ball grid array (FBGA) packaging, tape carrier packaging (TCP) and chip on film (COF) packaging services, as well as gold bumping services, among others. The Company’s products and services are used in information products, personal computers, communications equipment, office automation and consumer electronics. It mainly operates its business within domestic market, and in overseas markets, including the rest of Asia and the Americas.

About FormFactor

FormFactor, Inc. is a provider of test and measurement solutions. The Company’s segments include the Probe Cards segment and Systems segment. The Company designs, manufactures and sells multiple product lines, including probe cards, analytical probes, probe stations, integrated measurement systems, thermal sub-systems, reliability test systems, and related services. Its products provide electrical information from a range of semiconductor and electro-optical devices and integrated circuits (devices) from development to production. Probe Cards segment consists of probe card products and analytical probes. Systems segment consists of wafer probing, thermal and reliability products to enable precision on-wafer measurement of integrated circuits. Systems products are used in the early phases of the development and characterization of semiconductor processes.

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