Contrasting Advantest (OTCMKTS:ATEYY) and Semtech (OTCMKTS:SMTC)

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Advantest (OTCMKTS:ATEYY) and Semtech (NASDAQ:SMTC) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Analyst Ratings

This is a summary of current ratings and recommmendations for Advantest and Semtech, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advantest 1 1 1 0 2.00
Semtech 0 2 8 0 2.80

Semtech has a consensus price target of $53.10, indicating a potential upside of 8.92%. Given Semtech’s stronger consensus rating and higher possible upside, analysts clearly believe Semtech is more favorable than Advantest.

Profitability

This table compares Advantest and Semtech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advantest 19.87% 28.78% 18.34%
Semtech 7.34% 12.91% 8.37%

Volatility & Risk

Advantest has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, Semtech has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500.

Dividends

Advantest pays an annual dividend of $0.61 per share and has a dividend yield of 1.4%. Semtech does not pay a dividend. Advantest pays out 23.4% of its earnings in the form of a dividend.

Insider and Institutional Ownership

0.0% of Advantest shares are held by institutional investors. Comparatively, 96.3% of Semtech shares are held by institutional investors. 2.0% of Semtech shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Advantest and Semtech’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advantest $2.56 billion 3.26 $512.94 million $2.61 16.53
Semtech $627.20 million 5.17 $63.06 million $1.33 36.65

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

Summary

Semtech beats Advantest on 9 of the 16 factors compared between the two stocks.

Advantest Company Profile

Advantest Corporation manufactures and sells semiconductor and component test system products and mechatronics-related products. It operates through Semiconductor and Component Test System; Mechatronics System; and Services, Support and Others segments. The Semiconductor and Component Test System segment provides customers with test system products for the semiconductor industry and the electronic parts industry. This segment offers test systems for SoC semiconductors for use in non-memory semiconductor devices; and test systems for memory semiconductors for use in memory semiconductor devices. The Mechatronics System segment provides test handlers; mechatronic-applied products for handling semiconductor devices; and device interfaces, which serve as interfaces with the devices that are measured. This segment also engages in the operations related to nano-technology products. The Services, Support and Others segment provides customer solutions for the semiconductor and component test system and mechatronics system segments; and support services. This segment is also involved in the equipment lease business and others. In addition, the company engages in research and development activities measuring and testing technologies; and sale of used products. Advantest Corporation serves fabless semiconductor companies, foundries, and test houses, as well as industrial, design, and manufacturing companies in Japan, Korea, the People's Republic of China, Taiwan, Singapore, the Americas, and Europe. The company was founded in 1954 and is headquartered in Tokyo, Japan.

Semtech Company Profile

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor products and advanced algorithms. The company provides signal integrity products, including a portfolio of optical data communications and video transport products used in various enterprise computing, industrial, and communications applications; a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications. It also offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and wireless and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products used in industrial and consumer applications. In addition, the company provides power products consisting of switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging that control, alter, regulate, and condition the power within electronic systems. It serves original equipment manufacturers and their suppliers in the enterprise computing, communications, and consumer and industrial end-markets. The company sells its products directly, as well as through independent sales representative firms and independent distributors in the United States, Europe, and Asia. Semtech Corporation was founded in 1960 and is headquartered in Camarillo, California.

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