Analyzing Chipmos Technologies (NASDAQ:IMOS) and Cohu (NASDAQ:COHU)

Cohu (NASDAQ:COHU) and Chipmos Technologies (NASDAQ:IMOS) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Volatility and Risk

Cohu has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500. Comparatively, Chipmos Technologies has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Insider & Institutional Ownership

94.7% of Cohu shares are held by institutional investors. Comparatively, 7.4% of Chipmos Technologies shares are held by institutional investors. 3.0% of Cohu shares are held by company insiders. Comparatively, 22.7% of Chipmos Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Cohu and Chipmos Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cohu	-7.43%	-1.96%	-1.30%
Chipmos Technologies	8.30%	9.25%	4.96%

Valuation and Earnings

This table compares Cohu and Chipmos Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cohu	$522.60 million	5.35	-$74.27 million	($0.83)	-71.19
Chipmos Technologies	$762.90 million	2.48	$17.55 million	$2.04	26.29

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

Dividends

Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Chipmos Technologies pays an annual dividend of $0.64 per share and has a dividend yield of 1.2%. Cohu pays out -28.9% of its earnings in the form of a dividend. Chipmos Technologies pays out 31.4% 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.

Analyst Ratings

This is a breakdown of current ratings and price targets for Cohu and Chipmos Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cohu	1	0	7	2	3.00
Chipmos Technologies	0	1	0	0	2.00

Cohu currently has a consensus price target of $68.75, suggesting a potential upside of 16.36%. Given Cohu’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Cohu is more favorable than Chipmos Technologies.

Summary

Chipmos Technologies beats Cohu on 9 of the 17 factors compared between the two stocks.

About Cohu

Cohu, Inc., through its subsidiaries, provides semiconductor test equipment and services in China, the United States, Taiwan, Malaysia, the Philippines, and internationally. The company supplies semiconductor test and inspection handlers, micro-electromechanical system (MEMS) test modules, test contactors, thermal sub-systems, and semiconductor automated test equipment for semiconductor manufacturers and test subcontractors. It also provides semiconductor automated test equipment for wafer level and device package testing; various test handlers, including pick-and-place, turret, gravity, strip, and MEMS and thermal sub-systems; interface products comprising test contactors, and probe heads and pins; spares and kits; various parts and labor warranties on test and handling systems, and instruments; and training on the maintenance and operation of its systems, as well as application, data management software, and consulting services on its products. In addition, the company offers data analytics product that includes DI-Core, a software suite used to optimize Cohu equipment performance, which provides real-time online performance monitoring and process control. It markets its products through direct sales force and independent sales representatives. The company was formerly known as Cohu Electronics, Inc. and changed its name to Cohu, Inc. in 1972. The company was incorporated in 1947 and is headquartered in Poway, California.

About Chipmos Technologies

ChipMOS TECHNOLOGIES INC. engages in the research, development, manufacture, and sale of high-integration and high-precision integrated circuits, and related assembly and testing services in the People’s Republic of China, Taiwan, Japan, Singapore, and internationally. It operates through Testing; Assembly; Testing and Assembly for LCD, OLED and Other Display Panel Driver Semiconductors; Bumping; and Others segments. The company provides a range of back-end assembly and testing services, including engineering test, wafer probing, and final test of memory and logic/mixed-signal semiconductors, as well as leadframe-based and organic substrate-based package assembly services for memory and logic/mixed-signal semiconductors; and gold bumping, and testing and assembly services for LCD, OLED, and other panel display driver semiconductors. Its semiconductors are used in personal computers; office automation and consumer electronics; and communications equipment applications. The company was incorporated in 1997 and is headquartered in Hsinchu City, Taiwan.