Contrasting Power Integrations (POWI) & Cavium (CAVM)

Power Integrations (NASDAQ: POWI) and Cavium (NASDAQ:CAVM) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares Power Integrations and Cavium’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Power Integrations 13.37% 12.08% 10.77%
Cavium -22.82% 5.94% 2.78%

Volatility & Risk

Power Integrations has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Cavium has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Power Integrations and Cavium, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Power Integrations 0 1 3 0 2.75
Cavium 0 5 13 0 2.72

Power Integrations currently has a consensus target price of $81.33, indicating a potential upside of 10.13%. Cavium has a consensus target price of $77.13, indicating a potential upside of 15.90%. Given Cavium’s higher probable upside, analysts plainly believe Cavium is more favorable than Power Integrations.

Insider & Institutional Ownership

95.4% of Power Integrations shares are held by institutional investors. Comparatively, 98.4% of Cavium shares are held by institutional investors. 4.3% of Power Integrations shares are held by company insiders. Comparatively, 4.7% of Cavium shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Power Integrations pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Cavium does not pay a dividend. Power Integrations pays out 29.9% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Power Integrations and Cavium’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Power Integrations $414.04 million 5.31 $75.89 million $1.87 39.49
Cavium $865.94 million 5.28 $79.41 million ($2.96) -22.48

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

Summary

Cavium beats Power Integrations on 9 of the 16 factors compared between the two stocks.

Power Integrations Company Profile

Power Integrations, Inc. designs, develops and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion. The Company’s products are used in power converters that convert electricity from a high-voltage source to the type of power required for downstream use. The Company’s ICs used in alternating current (AC)-direct current (DC) power supply convert high-voltage AC from a wall outlet to the low-voltage DC required by electronic devices. The Company offers a range of products, such as TOPSwitch, TinySwitch, LinkSwitch and Hiper families. The Company also offers CapZero and SenZero families. The Company offers a range of high-voltage gate-driver products sold under the SCALE and SCALE-II product-family names. The DPA-Switch family of products is a monolithic high-voltage DC-DC power conversion IC designed specifically for use in distributed power architectures.

Cavium Company Profile

Cavium, Inc. is a provider of integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. The Company’s products consist of multi-core processors for embedded and data center applications, network connectivity for server and switches, storage connectivity, and security processors for offload and appliance. A range of its products also include a suite of embedded security protocols that enable unified threat management (UTM), secure connectivity, network perimeter protection and deep packet inspection (DPI). The Company sells its products to networking original equipment manufacturers (OEM), which sell into the enterprise, datacenter, service provider, and broadband and consumer markets. In the enterprise market, its products are used in routers, switches, storage appliances, server connectivity for networking and storage, wireless local area networks and UTM.

Receive News & Ratings for Power Integrations Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Power Integrations Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply