QUALCOMM (NASDAQ:QCOM) and Diodes (NASDAQ:DIOD) Critical Review

Diodes (NASDAQ:DIOD) and QUALCOMM (NASDAQ:QCOM) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Volatility & Risk

Diodes has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500. Comparatively, QUALCOMM has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500.

Profitability

This table compares Diodes and QUALCOMM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diodes	4.49%	2.81%	2.21%
QUALCOMM	12.51%	43.22%	20.62%

Insider & Institutional Ownership

99.2% of Diodes shares are owned by institutional investors. Comparatively, 74.4% of QUALCOMM shares are owned by institutional investors. 2.3% of Diodes shares are owned by insiders. Comparatively, 0.1% of QUALCOMM shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Diodes and QUALCOMM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diodes	1	2	2	1	2.50
QUALCOMM	1	9	11	0	2.48

Diodes presently has a consensus price target of $55.33, suggesting a potential downside of 1.79%. QUALCOMM has a consensus price target of $191.28, suggesting a potential upside of 24.15%. Given QUALCOMM’s higher probable upside, analysts plainly believe QUALCOMM is more favorable than Diodes.

Valuation & Earnings

This table compares Diodes and QUALCOMM”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diodes	$1.31 billion	1.99	$44.02 million	$1.38	40.83
QUALCOMM	$44.28 billion	3.73	$5.54 billion	$4.89	31.51

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

Summary

QUALCOMM beats Diodes on 9 of the 15 factors compared between the two stocks.

About Diodes

Diodes Incorporated, together with its subsidiaries, manufactures and supplies application-specific standard products in the broad discrete, logic, analog, and mixed-signal semiconductor markets worldwide. The company offers discrete semiconductor products, such as MOSFETs, SiC MOSFETs; data line protection, power line protection, thyristers, USB Type-C protection, and transient voltage suppressors; Schottky, small signal switching, Zener, and SiC diodes; bridges, super barrier, Schottky, Schottky bridge, and fast/ultra-fast rectifiers; and bipolar, avalanche, gate driver, and pre-bias transistors. It also provides analog products, including power management devices comprising AC-DC and DC-DC converters, USB power switches, low dropout, photocoupler and linear voltage regulators; standard linear devices consisting of operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, such as hall-effect sensors and motor drivers. In addition, the company offers mixed-signal products, such as high speed mux/demux, digital switches, interface, redrivers, universal level shifters/voltage translators, clock ICs and packet switches; standard logic products comprising low-voltage complementary metal-oxide-semiconductor (CMOS) and advanced high-speed CMOS devices; ultra-low power CMOS logic; and analog switches; multichip products and co-packaged discrete, analog and mixed-signal silicon in miniature packages; and silicon and silicon epitaxial wafers used in manufacturing frequency control products and contact images sensors. It serves the industrial, automotive, computing, communications, and consumer markets through direct sales, marketing personnel, independent sales representatives, and distributors. The company was incorporated in 1959 and is headquartered in Plano, Texas.

About QUALCOMM

QUALCOMM Incorporated engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, computing, multimedia, and position location products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, WCDMA, LTE and/or OFDMA-based 5G standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including 5G, artificial intelligence, automotive, consumer, enterprise, cloud, IoT, and extended reality, and investments, including non-marketable equity securities and, to a lesser extent, marketable equity securities, and convertible debt instruments. It also provides development, and other services and related products to the United States government agencies and their contractors. The company was incorporated in 1985 and is headquartered in San Diego, California.