Cavium (NASDAQ: CAVM) and Micron Technology (NASDAQ:MU) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, profitability, valuation, earnings and risk.

Earnings & Valuation

This table compares Cavium and Micron Technology’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cavium $865.94 million 5.41 $79.41 million ($2.96) -23.00
Micron Technology $17.40 billion 2.52 $7.03 billion $4.32 9.16

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

Profitability

This table compares Cavium and Micron Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cavium -22.82% 5.94% 2.78%
Micron Technology 25.04% 32.09% 16.15%

Volatility and Risk

Cavium has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, Micron Technology has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500.

Insider & Institutional Ownership

98.4% of Cavium shares are held by institutional investors. Comparatively, 79.3% of Micron Technology shares are held by institutional investors. 4.7% of Cavium shares are held by insiders. Comparatively, 0.7% of Micron Technology shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Cavium and Micron Technology, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cavium 0 4 13 0 2.76
Micron Technology 1 3 28 0 2.84

Cavium currently has a consensus price target of $78.13, suggesting a potential upside of 14.75%. Micron Technology has a consensus price target of $44.83, suggesting a potential upside of 13.32%. Given Cavium’s higher probable upside, equities research analysts clearly believe Cavium is more favorable than Micron Technology.

Summary

Micron Technology beats Cavium on 9 of the 14 factors compared between the two stocks.

About Cavium

Cavium, Inc. is a provider of integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. The Company’s products consist of multi-core processors for embedded and data center applications, network connectivity for server and switches, storage connectivity, and security processors for offload and appliance. A range of its products also include a suite of embedded security protocols that enable unified threat management (UTM), secure connectivity, network perimeter protection and deep packet inspection (DPI). The Company sells its products to networking original equipment manufacturers (OEM), which sell into the enterprise, datacenter, service provider, and broadband and consumer markets. In the enterprise market, its products are used in routers, switches, storage appliances, server connectivity for networking and storage, wireless local area networks and UTM.

About Micron Technology

Micron Technology, Inc. is engaged in semiconductor systems. The Company’s portfolio of memory technologies, including dynamic random-access memory (DRAM), negative-AND (NAND) Flash and NOR Flash are the basis for solid-state drives, modules, multi-chip packages and other system solutions. Its business segments include Compute and Networking Business Unit (CNBU), which includes memory products sold into compute, networking, graphics and cloud server markets; Mobile Business Unit (MBU), which includes memory products sold into smartphone, tablet and other mobile-device markets; Storage Business Unit (SBU), which includes memory products sold into enterprise, client, cloud and removable storage markets, and SBU also includes products sold to Intel through its Intel/Micron Flash Technology (IMFT) joint venture, and Embedded Business Unit (EBU), which includes memory products sold into automotive, industrial, connected home and consumer electronics markets.

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