DSP Group (NASDAQ:DSPG) and Inphi (NYSE:IPHI) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Earnings and Valuation

This table compares DSP Group and Inphi’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DSP Group $124.75 million 2.11 -$3.00 million $0.17 69.71
Inphi $348.20 million 4.75 -$74.90 million $0.58 64.64

DSP Group has higher earnings, but lower revenue than Inphi. Inphi is trading at a lower price-to-earnings ratio than DSP Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

81.5% of DSP Group shares are owned by institutional investors. 5.3% of DSP Group shares are owned by insiders. Comparatively, 3.4% of Inphi shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for DSP Group and Inphi, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DSP Group 0 0 3 0 3.00
Inphi 2 4 6 0 2.33

DSP Group currently has a consensus price target of $15.67, indicating a potential upside of 33.22%. Inphi has a consensus price target of $37.29, indicating a potential downside of 0.37%. Given DSP Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe DSP Group is more favorable than Inphi.

Profitability

This table compares DSP Group and Inphi’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DSP Group -1.44% 3.96% 3.16%
Inphi -25.21% -5.28% -2.30%

Risk & Volatility

DSP Group has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Inphi has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Summary

DSP Group beats Inphi on 9 of the 14 factors compared between the two stocks.

About DSP Group

DSP Group, Inc., a fabless semiconductor company, provides wireless and audio chipset solutions for converged communications worldwide. It operates through three segments: Home, Office, and SmartVoice. The company provides a portfolio of wireless chipsets that integrate DECT/CAT-iq, ULE, Wi-Fi, PSTN, HDClear, video, and VoIP technologies. It also enables converged voice, audio, video, and data connectivity across various mobile, consumer, and enterprise products, including mobile phones, IoT and wearable devices, connected multimedia screens, home automation and security, cordless phones, VoIP systems, and home gateways. The company sells its products primarily through distributors, as well as directly to original equipment manufacturers and original design manufacturers. DSP Group, Inc. was founded in 1979 and is headquartered in Milpitas, California.

About Inphi

Inphi Corporation provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. The company's analog and mixed signal semiconductor solutions offers high signal integrity at data speeds while reducing system power consumption. Its semiconductor solutions are designed to address bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing environments, and enable the rollout of next generation communications and datacenter infrastructures. Its solutions provide a high-speed interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, datacenters and enterprise servers, storage platforms, test and measurement systems, and military systems. The company also provides 25G to 600G high-speed analog semiconductor solutions for the communications market. Its products perform a range of functions, such as amplifying, encoding, multiplexing, demultiplexing, retiming signals at speeds up to 400 Gbps. Inphi Corporation sells its products directly through its sales force, as well as through a network of sales representatives and distributors to original equipment manufacturers. The company was formerly known as TCom Communications, Inc. and changed its name to Inphi Corporation in February 2001. Inphi Corporation was incorporated in 2000 and is headquartered in Santa Clara, California.

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