United Microelectronics (NYSE:UMC) and Semtech (NASDAQ:SMTC) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, risk, analyst recommendations and profitability.

Profitability

This table compares United Microelectronics and Semtech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Microelectronics 8.16% 5.74% 3.17%
Semtech 8.48% 12.66% 7.91%

Dividends

United Microelectronics pays an annual dividend of $0.08 per share and has a dividend yield of 3.8%. Semtech does not pay a dividend.

Analyst Ratings

This is a breakdown of recent ratings for United Microelectronics and Semtech, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Microelectronics 2 5 1 0 1.88
Semtech 0 1 10 0 2.91

United Microelectronics presently has a consensus price target of $2.60, suggesting a potential upside of 22.07%. Semtech has a consensus price target of $59.50, suggesting a potential upside of 22.43%. Given Semtech’s stronger consensus rating and higher probable upside, analysts clearly believe Semtech is more favorable than United Microelectronics.

Volatility & Risk

United Microelectronics has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Semtech has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.

Valuation & Earnings

This table compares United Microelectronics and Semtech’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Microelectronics $5.01 billion 1.04 $326.47 million N/A N/A
Semtech $587.85 million 5.47 $36.42 million $1.40 34.71

United Microelectronics has higher revenue and earnings than Semtech.

Institutional & Insider Ownership

5.4% of United Microelectronics shares are held by institutional investors. Comparatively, 96.5% of Semtech shares are held by institutional investors. 8.0% of United Microelectronics shares are held by insiders. Comparatively, 2.3% of Semtech shares are held by 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.

Summary

Semtech beats United Microelectronics on 10 of the 14 factors compared between the two stocks.

United Microelectronics Company Profile

United Microelectronics Corporation provides semiconductor wafer foundry solutions. The company operates through Wafer Fabrication and New Business segments. It provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. The company also engages in the research, development, and manufacture of products in the solar energy and light-emitting diode industries. It serves fabless design companies, and integrated device manufacturers. The company operates primarily in Taiwan, Singapore, China, Japan, Europe, and the United States. United Microelectronics Corporation was founded in 1980 and is headquartered in Hsinchu City, Taiwan.

Semtech Company Profile

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor products and advanced algorithms. The company provides signal integrity products, including a portfolio of optical data communications and video transport products used in various enterprise computing, industrial, communications, and high-end consumer applications; and a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications. It also offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and wireless and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products used in industrial and consumer applications. In addition, the company provides power products consisting of switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging that control, alter, regulate, and condition the power within electronic systems; and discrete semiconductor products, including rectifiers, assemblies, and other products for use in industrial, military, medical, and automotive applications, as well as aerospace and defense systems, such as satellite communications. It serves original equipment manufacturers and their suppliers in the enterprise computing, communications, and consumer and industrial end-markets. The company sells its products directly, as well as through independent sales representative firms and independent distributors in the United States, Europe, and Asia. Semtech Corporation was founded in 1960 and is headquartered in Camarillo, California.

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