Contrasting Amkor Technology (NASDAQ:AMKR) & Monolithic Power Systems (NASDAQ:MPWR)

Amkor Technology (NASDAQ:AMKR) and Monolithic Power Systems (NASDAQ:MPWR) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Volatility and Risk

Amkor Technology has a beta of 1.84, indicating that its stock price is 84% more volatile than the S&P 500. Comparatively, Monolithic Power Systems has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Profitability

This table compares Amkor Technology and Monolithic Power Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amkor Technology	5.84%	9.53%	5.57%
Monolithic Power Systems	22.44%	21.01%	17.47%

Analyst Ratings

This is a breakdown of current ratings and price targets for Amkor Technology and Monolithic Power Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amkor Technology	0	3	4	0	2.57
Monolithic Power Systems	0	1	8	0	2.89

Amkor Technology presently has a consensus target price of $37.67, indicating a potential upside of 14.28%. Monolithic Power Systems has a consensus target price of $743.78, indicating a potential downside of 1.05%. Given Amkor Technology’s higher probable upside, equities analysts clearly believe Amkor Technology is more favorable than Monolithic Power Systems.

Earnings & Valuation

This table compares Amkor Technology and Monolithic Power Systems’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amkor Technology	$6.50 billion	1.25	$359.81 million	$1.52	21.68
Monolithic Power Systems	$1.82 billion	20.09	$427.37 million	$8.39	89.59

Monolithic Power Systems has lower revenue, but higher earnings than Amkor Technology. Amkor Technology is trading at a lower price-to-earnings ratio than Monolithic Power Systems, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

42.8% of Amkor Technology shares are owned by institutional investors. Comparatively, 93.5% of Monolithic Power Systems shares are owned by institutional investors. 31.4% of Amkor Technology shares are owned by insiders. Comparatively, 3.2% of Monolithic Power Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Amkor Technology pays an annual dividend of $0.31 per share and has a dividend yield of 0.9%. Monolithic Power Systems pays an annual dividend of $5.00 per share and has a dividend yield of 0.7%. Amkor Technology pays out 20.4% of its earnings in the form of a dividend. Monolithic Power Systems pays out 59.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Amkor Technology has raised its dividend for 3 consecutive years and Monolithic Power Systems has raised its dividend for 7 consecutive years. Amkor Technology is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Monolithic Power Systems beats Amkor Technology on 11 of the 17 factors compared between the two stocks.

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.

About Monolithic Power Systems

Monolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, consumer, communications, and industrial markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as cloud-based CPU servers, server artificial intelligence applications, storage applications, commercial notebooks, digital cockpit, power sources, home appliances, 4G and 5G infrastructure, and satellite communications applications. It offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in computers and notebooks, monitors, car navigation systems, and televisions, as well as for general illumination products. The company sells its products through third-party distributors, value-added resellers, directly to original equipment manufacturers, original design manufacturers, electronic manufacturing service providers, and other end customers. It serves China, Taiwan, South Korea, Europe, Japan, Southeast Asia, the United States, and internationally. Monolithic Power Systems, Inc. was incorporated in 1997 and is headquartered in Kirkland, Washington.