Critical Analysis: Tower Semiconductor (TSEM) versus Jabil Circuit (JBL)
Tower Semiconductor (NASDAQ: TSEM) and Jabil Circuit (NYSE:JBL) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
Insider and Institutional Ownership
45.3% of Tower Semiconductor shares are owned by institutional investors. Comparatively, 96.1% of Jabil Circuit shares are owned by institutional investors. 1.0% of Tower Semiconductor shares are owned by company insiders. Comparatively, 2.9% of Jabil Circuit shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk and Volatility
Tower Semiconductor has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Jabil Circuit has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.
Jabil Circuit pays an annual dividend of $0.32 per share and has a dividend yield of 1.1%. Tower Semiconductor does not pay a dividend. Jabil Circuit pays out 46.4% of its earnings in the form of a dividend.
This is a summary of recent ratings and target prices for Tower Semiconductor and Jabil Circuit, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Tower Semiconductor currently has a consensus target price of $33.00, suggesting a potential downside of 0.45%. Jabil Circuit has a consensus target price of $29.70, suggesting a potential upside of 4.36%. Given Jabil Circuit’s higher possible upside, analysts plainly believe Jabil Circuit is more favorable than Tower Semiconductor.
Valuation and Earnings
This table compares Tower Semiconductor and Jabil Circuit’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Tower Semiconductor||$1.25 billion||2.60||$203.92 million||$1.95||17.00|
|Jabil Circuit||$19.06 billion||0.26||$129.09 million||$0.69||41.25|
Tower Semiconductor has higher revenue, but lower earnings than Jabil Circuit. Tower Semiconductor is trading at a lower price-to-earnings ratio than Jabil Circuit, indicating that it is currently the more affordable of the two stocks.
This table compares Tower Semiconductor and Jabil Circuit’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Tower Semiconductor beats Jabil Circuit on 10 of the 15 factors compared between the two stocks.
Tower Semiconductor Company Profile
Tower Semiconductor Ltd. operates as an independent semiconductor foundry focused primarily on specialty process technologies. The Company focuses on producing integrated circuits (ICs) based on the design specifications of its customers. The Company manufactures semiconductors for its customers primarily based on third-party designs. It offers process manufacture geometries of 0.35, 0.50, 0.55, 0.60, 0.80-micron and above on 150 millimeter wafers, 0.35, 0.18. 0.16, 0.13 and 0.11-micron on 200 millimeter wafers, and 65 nanometer and 45 nanometer on 300 millimeter wafers. It also provides design support and technical services. The Company’s ICs are incorporated into a range of products in markets, including consumer electronics, personal computers, communications, automotive, industrial and medical device products. The Company has manufacturing facilities in the United States, Israel and Japan.
Jabil Circuit Company Profile
Jabil Inc., formerly Jabil Circuit, Inc., provides electronic manufacturing services and solutions throughout the world. The Company operates in two segments, which include Electronics Manufacturing Services (EMS) and Diversified Manufacturing Services (DMS). The Company’s EMS segment is focused on leveraging information technology (IT), supply chain design and engineering, technologies centered on core electronics, sharing of its large scale manufacturing infrastructure and the ability to serve a range of markets. Its DMS segment is focused on providing engineering solutions and a focus on material sciences and technologies. It provides electronic design, production and product management services to companies in the automotive, capital equipment, consumer lifestyles and wearable technologies, computing and storage, defense and aerospace, digital home, emerging growth, healthcare, industrial and energy, mobility, packaging, point of sale and printing industries.
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