MACOM Technology Solutions Holdings (NASDAQ: MTSI) and Cohu (NASDAQ:COHU) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current ratings for MACOM Technology Solutions Holdings and Cohu, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MACOM Technology Solutions Holdings 0 1 4 0 2.80
Cohu 0 2 2 0 2.50

MACOM Technology Solutions Holdings currently has a consensus price target of $55.60, indicating a potential upside of 33.27%. Cohu has a consensus price target of $23.67, indicating a potential upside of 31.34%. Given MACOM Technology Solutions Holdings’ stronger consensus rating and higher probable upside, research analysts plainly believe MACOM Technology Solutions Holdings is more favorable than Cohu.

Earnings and Valuation

This table compares MACOM Technology Solutions Holdings and Cohu’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MACOM Technology Solutions Holdings $685.09 million 3.91 $136.09 million ($2.50) -16.69
Cohu $314.92 million 1.60 $37.41 million $0.69 26.12

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

Institutional & Insider Ownership

75.1% of MACOM Technology Solutions Holdings shares are held by institutional investors. Comparatively, 78.2% of Cohu shares are held by institutional investors. 57.1% of MACOM Technology Solutions Holdings shares are held by insiders. Comparatively, 6.0% of Cohu shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. MACOM Technology Solutions Holdings does not pay a dividend. Cohu pays out 34.8% of its earnings in the form of a dividend.

Profitability

This table compares MACOM Technology Solutions Holdings and Cohu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MACOM Technology Solutions Holdings -22.43% 17.21% 7.73%
Cohu 6.21% 11.59% 7.76%

Risk & Volatility

MACOM Technology Solutions Holdings has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, Cohu has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Summary

MACOM Technology Solutions Holdings beats Cohu on 10 of the 15 factors compared between the two stocks.

About MACOM Technology Solutions Holdings

MACOM Technology Solutions Holdings, Inc. is a provider of high-performance analog semiconductor solutions that enable Internet applications, the cloud-connected applications economy, and the networked battlefield across the radio frequency (RF), microwave, millimeterwave and photonic spectrum. It has multiple design centers, silicon, gallium arsenide and indium phosphide fabrication, manufacturing, assembly and test, and operational facilities throughout North America, Europe, Asia and Australia. It also offers foundry services. It offered a portfolio of over 4,500 standard and custom devices, which include integrated circuits, multi-chip modules, power pallets and transistors, diodes, amplifiers, switches and switch limiters, passive and active components and complete subsystems, across more than 40 product lines serving three primary markets, as of September 30, 2016. The Company’s products are RF Power Products, Optoelectronics and Photonic Solutions, among others.

About Cohu

Cohu, Inc. is a supplier of semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors and thermal sub-systems used by global semiconductor manufacturers and test subcontractors. It develops, manufactures, sells and services a line of equipment capable of handling a range of integrated circuits and light-emitting diodes. It operates through semiconductor equipment segment. It offers products for the pick-and-place, gravity-feed, test-in-strip and turret handling, MEMS, burn-in and system-level test markets. It sells various products, including Delta MATRiX, Delta Pyramid, Delta Eclipse, Delta LinX, Rasco SO1000, Rasco SO2000, Rasco Saturn and Jupiter, Rasco Jaguar, Ismeca NY32, Ismeca NY20 and Delta Fusion HD. Its manufacturing operations are located in Malacca, Malaysia (handlers); Poway, California (thermal subsystems); Laguna, the Philippines (kits and contactors); Kolbermoor, Germany (handlers), and Osaka, Japan (contactors).

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