Analyzing SMC (OTCMKTS:SMCAY) and SiTime (NASDAQ:SITM)

SMC (OTCMKTS:SMCAY) and SiTime (NASDAQ:SITM) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for SMC and SiTime, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SMC	0	1	0	0	2.00
SiTime	2	0	7	0	2.56

SiTime has a consensus price target of $343.13, indicating a potential upside of 3.01%. Given SiTime’s stronger consensus rating and higher probable upside, analysts plainly believe SiTime is more favorable than SMC.

Profitability

This table compares SMC and SiTime’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SMC	19.72%	7.87%	7.16%
SiTime	-25.18%	-5.69%	-4.76%

Volatility and Risk

SMC has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, SiTime has a beta of 2.49, indicating that its stock price is 149% more volatile than the S&P 500.

Earnings & Valuation

This table compares SMC and SiTime”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SMC	$5.20 billion	4.46	$1.03 billion	$0.84	21.63
SiTime	$202.70 million	42.89	-$93.60 million	($2.96)	-112.53

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

Insider and Institutional Ownership

1.0% of SMC shares are held by institutional investors. Comparatively, 84.3% of SiTime shares are held by institutional investors. 2.1% of SiTime shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

About SMC

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers air management system, directional control valves, air cylinders, rotatory actuators/air grippers, electric actuators/cylinders, fitting and tubing, and modular F.R.L./pressure control equipment, as well as vacuum, air preparation, and lubrication equipment. It also provides flow control equipment, speed controllers, silencers/exhaust/blow guns/pressure gauges, switches/sensors/controllers, static neutralization equipment, and industrial device communication equipment/wireless system. In addition, the company offers process valves, chemical liquid valves/fittings and needle valves/tubing, process pumps, temperature control equipment, and process gas equipment, as well as high vacuum equipment, industrial filters/sintered metal elements, and pneumatic instrumentation and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.

About SiTime

SiTime Corporation designs, develops, and sells silicon timing systems solutions in Taiwan, Hong Kong, the United States, Singapore, and internationally. The company provides resonators and clock integrated circuits, and various types of oscillators. It serves various markets, including communications, datacenter, enterprise, automotive, industrial, internet of things, mobile, consumer, and aerospace and defense. The company sells its products directly to customers, distributors, and resellers. SiTime Corporation was incorporated in 2003 and is based in Santa Clara, California.