Head-To-Head Review: STMicroelectronics N.V. (STM) and United Microelectronics Corporation (UMC)
STMicroelectronics N.V. (NYSE: STM) and United Microelectronics Corporation (NYSE:UMC) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.
Insider and Institutional Ownership
5.3% of STMicroelectronics N.V. shares are held by institutional investors. Comparatively, 5.4% of United Microelectronics Corporation shares are held by institutional investors. 8.0% of United Microelectronics Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares STMicroelectronics N.V. and United Microelectronics Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Microelectronics Corporation||6.52%||4.58%||2.60%|
STMicroelectronics N.V. pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. United Microelectronics Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 2.3%. STMicroelectronics N.V. pays out 40.0% of its earnings in the form of a dividend. United Microelectronics Corporation pays out 46.2% 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.
Valuation & Earnings
This table compares STMicroelectronics N.V. and United Microelectronics Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|STMicroelectronics N.V.||$7.40 billion||2.28||$1.23 billion||$0.50||38.03|
|United Microelectronics Corporation||$5.02 billion||1.28||$1.89 billion||$0.13||20.19|
United Microelectronics Corporation has higher revenue, but lower earnings than STMicroelectronics N.V.. United Microelectronics Corporation is trading at a lower price-to-earnings ratio than STMicroelectronics N.V., indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
STMicroelectronics N.V. has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, United Microelectronics Corporation has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.
This is a summary of recent ratings and price targets for STMicroelectronics N.V. and United Microelectronics Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Microelectronics Corporation||8||1||0||0||1.11|
STMicroelectronics N.V. presently has a consensus price target of $18.17, indicating a potential downside of 4.46%. United Microelectronics Corporation has a consensus price target of $2.10, indicating a potential downside of 20.00%. Given STMicroelectronics N.V.’s stronger consensus rating and higher possible upside, analysts plainly believe STMicroelectronics N.V. is more favorable than United Microelectronics Corporation.
STMicroelectronics N.V. beats United Microelectronics Corporation on 11 of the 16 factors compared between the two stocks.
STMicroelectronics N.V. Company Profile
STMicroelectronics N.V. is a global semiconductor company that designs, develops, manufactures and markets a range of products, including discrete and standard commodity components, and application-specific integrated circuits (ASICs) for analog, digital and mixed-signal applications. The Company’s segments include Automotive and Discrete Group (ADG), Analog and MEMS Group (AMG), Microcontrollers and Digital ICs Group (MDG), and Others. ADG comprises all dedicated automotive Integrated Circuits (ICs), and discrete and power transistor products. AMG includes low-power analog ICs for all markets; smart power products; Touch Screen Controllers; Low Power Connectivity solutions for Internet of Things (IoT), and power conversion products. MDG comprises general purpose and secure microcontrollers, and Electrically Erasable Programmable Read-Only Memory memories. The Others segment includes all the financial values related to the Imaging Product Division, Subsystems and other products.
United Microelectronics Corporation Company Profile
United Microelectronics Corporation is a global semiconductor foundry. The Company provides integrated circuit (IC) production for applications spanning every sector of the electronics industry. The Company operates through two segments: wafer fabrication and new business. The primary operating activity of the Company’s wafer fabrication segment is the manufacture of chips to the design specifications of its customers by using its own processes and techniques. The new business segment primarily includes researching, developing, manufacturing, and providing solar energy and new generation light-emitting diode (LED). The Company maintains a customer base across various industries, including communication, consumer electronics, computer, memory and others, while focusing on manufacturing for applications, including networking, telecommunications, Internet, multimedia, personal computers (PCs) and graphics.
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