Quantenna Communications (NASDAQ:QTNA) and Microchip Technology (NASDAQ:MCHP) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Insider and Institutional Ownership

61.8% of Quantenna Communications shares are owned by institutional investors. 13.5% of Quantenna Communications shares are owned by company insiders. Comparatively, 2.1% of Microchip Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Microchip Technology pays an annual dividend of $1.46 per share and has a dividend yield of 1.9%. Quantenna Communications does not pay a dividend. Microchip Technology pays out 28.1% of its earnings in the form of a dividend. Microchip Technology has raised its dividend for 16 consecutive years.

Profitability

This table compares Quantenna Communications and Microchip Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quantenna Communications 17.33% 3.33% 2.73%
Microchip Technology 2.85% 36.33% 12.59%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Quantenna Communications and Microchip Technology, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quantenna Communications 0 1 8 1 3.00
Microchip Technology 0 6 11 1 2.72

Quantenna Communications presently has a consensus target price of $20.00, indicating a potential upside of 7.47%. Microchip Technology has a consensus target price of $114.11, indicating a potential upside of 44.87%. Given Microchip Technology’s higher possible upside, analysts clearly believe Microchip Technology is more favorable than Quantenna Communications.

Volatility and Risk

Quantenna Communications has a beta of 1.95, meaning that its share price is 95% more volatile than the S&P 500. Comparatively, Microchip Technology has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.

Valuation & Earnings

This table compares Quantenna Communications and Microchip Technology’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Quantenna Communications $176.36 million 3.89 $34.41 million ($0.02) -930.50
Microchip Technology $3.98 billion 4.66 $255.40 million $5.19 15.18

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

Summary

Microchip Technology beats Quantenna Communications on 11 of the 17 factors compared between the two stocks.

Quantenna Communications Company Profile

Quantenna Communications, Inc. designs, develops, and markets wireless communication solutions enabling wireless local area networking in the United States and internationally. The company's solutions portfolio comprises radio frequency chips and digital baseband chips, which support the IEEE Wi-Fi standards, including 802.11n, 802.11ac, and draft 802.11ax. It offers its products for home networking applications, including home gateways, repeaters, and set-top boxes, as well as retail, outdoor, small and medium business, enterprise, and consumer electronics applications. The company sells its Wi-Fi solutions directly to original equipment manufacturers and original design manufacturers; and third-party distributors. Quantenna Communications, Inc. was founded in 2005 and is headquartered in Fremont, California.

Microchip Technology Company Profile

Microchip Technology Incorporated develops, manufactures, and sells semiconductor products for various embedded control applications. The company offers general purpose and specialized 8-bit, 16-bit, and 32-bit microcontrollers; 32-bit microprocessors; and microcontrollers for automotive networking, computing, lighting, power supplies, motor control, human machine interface, security, wired connectivity, and wireless connectivity. It also provides development tools that enable system designers to program microcontroller products for specific applications; analog, interface, mixed signal, and timing products comprising power management, linear, mixed-signal, high-voltage, thermal management, radio frequency (RF), drivers, safety, security, timing, USB, Ethernet, wireless, and other interface products; and memory products consisting of serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, and serial static random access memories for the production of very small footprint devices. In addition, the company licenses its SuperFlash embedded flash and Smartbits one time programmable NVM technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate array, RF, and analog products that require embedded non-volatile memory, as well as provides engineering services. Further, it provides wafer foundry and assembly and test subcontracting manufacturing services; and application specific integrated circuits, complex programmable logic devices, and aerospace products. It serves automotive, communications, computing, consumer, aerospace, defense, safety, security, medical, and industrial control markets. The company sells its products through a network of direct sales personnel and distributors in the Americas, Europe, and Asia. Microchip Technology Incorporated was founded in 1989 and is headquartered in Chandler, Arizona.

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