Critical Analysis: Qnity Electronics (NYSE:Q) and Rohm (OTCMKTS:ROHCY)

Qnity Electronics (NYSE:Q) and Rohm (OTCMKTS:ROHCY) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Profitability

This table compares Qnity Electronics and Rohm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Qnity Electronics	11.25%	10.83%	6.26%
Rohm	-29.85%	4.39%	2.70%

Dividends

Qnity Electronics pays an annual dividend of $0.32 per share and has a dividend yield of 0.3%. Rohm pays an annual dividend of $0.18 per share and has a dividend yield of 0.8%. Qnity Electronics pays out 11.4% of its earnings in the form of a dividend. Rohm pays out -7.0% 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. Rohm is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Qnity Electronics and Rohm”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Qnity Electronics	$4.75 billion	4.84	$692.00 million	$2.80	39.27
Rohm	$3.20 billion	2.87	-$1.05 billion	($2.57)	-9.25

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Qnity Electronics and Rohm, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Qnity Electronics	0	2	9	1	2.92
Rohm	0	1	1	0	2.50

Qnity Electronics currently has a consensus target price of $154.36, indicating a potential upside of 40.39%. Given Qnity Electronics’ stronger consensus rating and higher possible upside, equities analysts plainly believe Qnity Electronics is more favorable than Rohm.

Summary

Qnity Electronics beats Rohm on 12 of the 14 factors compared between the two stocks.

About Qnity Electronics

Qnity Electronics Inc. is a premier technology solution provider across the semiconductor value chain. Qnity Electronics Inc. is based in WILMINGTON, Del.

About Rohm

ROHM Co., Ltd. manufactures and sells electronic components worldwide. The company operates through three segments: LSI, Semiconductor Devices, and Modules. It provides ICs comprising memory, amplifiers and linear, power management, motor/actuator drivers, resistors, clocks and timers, switches and multiplexers, logic, data converters, sensors and MEMS, display drivers, interfaces, wireless LSIs, audio and video products, speech synthesis LSI, and microcontrollers. The company also offers discrete semiconductor products, such as MOSFETs, bipolar transistors, and diodes; power devices, including power transistors and diodes, SiC power devices, IGBT, and IPM; modules, including optical modules, wireless communication modules, wireless charger modules, and print heads; and opto devices comprising LEDs, LED displays, laser diodes, and optical sensors, as well as foundry services, including thin-film piezoelectric MEMS, wafers, and WL-CSP. Its products are used in industry, automotive, consumer electronics, and telecommunications applications. The company was incorporated in 1940 and is headquartered in Kyoto, Japan.