Xilinx (NASDAQ:XLNX) and ASE Technology (NYSE:ASX) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.
Institutional & Insider Ownership
84.8% of Xilinx shares are held by institutional investors. Comparatively, 5.3% of ASE Technology shares are held by institutional investors. 0.2% of Xilinx shares are held by insiders. Comparatively, 22.9% of ASE Technology shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Xilinx and ASE Technology’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Xilinx||$3.06 billion||7.95||$889.75 million||$3.48||27.65|
|ASE Technology||$12.34 billion||0.84||$856.61 million||$0.39||12.33|
Xilinx has higher earnings, but lower revenue than ASE Technology. ASE Technology is trading at a lower price-to-earnings ratio than Xilinx, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Xilinx has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, ASE Technology has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.
This is a breakdown of current ratings for Xilinx and ASE Technology, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Xilinx currently has a consensus target price of $118.62, indicating a potential upside of 23.28%. ASE Technology has a consensus target price of $30.00, indicating a potential upside of 523.70%. Given ASE Technology’s stronger consensus rating and higher probable upside, analysts clearly believe ASE Technology is more favorable than Xilinx.
Xilinx pays an annual dividend of $1.48 per share and has a dividend yield of 1.5%. ASE Technology pays an annual dividend of $0.11 per share and has a dividend yield of 2.3%. Xilinx pays out 42.5% of its earnings in the form of a dividend. ASE Technology pays out 28.2% 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. Xilinx has raised its dividend for 8 consecutive years. ASE Technology is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Xilinx and ASE Technology’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Xilinx beats ASE Technology on 11 of the 17 factors compared between the two stocks.
Xilinx, Inc. designs and develops programmable devices and associated technologies worldwide. Its programmable devices comprise integrated circuits (ICs) in the form of programmable logic devices (PLDs), such as programmable system on chips, and three dimensional ICs; adaptive compute acceleration platform; software design tools to program the PLDs; software development environments and embedded platforms; targeted reference designs; printed circuit boards; and intellectual property (IP) core licenses covering Ethernet, memory controllers, Interlaken, and peripheral component interconnect express interfaces, as well as domain-specific IP in the areas of embedded, digital signal processing and connectivity, and market-specific IP cores. The company also offers development boards; development kits, including hardware, design tools, IP, and reference designs that are designed to streamline and accelerate the development of domain-specific and market-specific applications; and configuration products, such as one-time programmable and in-system programmable storage devices to configure field programmable gate arrays. In addition, it provides design, customer training, field engineering, and technical support services. The company offers its products to electronic equipment manufacturers in sub-segments, such as wireline and data center, wireless, aerospace and defense, test and measurement, industrial, scientific and medical, automotive, audio, video and broadcast, and consumer. Xilinx, Inc. sells its products through a network of independent distributors; and through direct sales to original equipment manufacturers and electronic manufacturing service providers, as well as independent sales representatives. The company has a strategic collaboration with ZF Friedrichshafen AG; and technology collaboration with Shenzhen Youjia Innovation Technology Co., Ltd. Xilinx, Inc. was founded in 1984 and is headquartered in San Jose, California.
About ASE Technology
ASE Technology Holding Co., Ltd. provides a range of semiconductors packaging and testing, and electronic manufacturing services (EMS) in the United States, Taiwan, Asia, Europe, and internationally. The company offers packaging services, including flip-chip ball grid array (BGA), flip-chip chip scale package (fcCSP), advanced chip scale packages (aCSP), quad flat packages, thin quad flat packages, bump chip carrier and quad flat no-lead (QFN) packages, advanced QFN packages, plastic BGAs, high-band package on package, and 3D chip packages; stacked die solutions in various package types; and copper wire and silver bonding solutions, as well as module-based solutions. It also provides advanced packages, including aCSP; fcCSP; flip-chip package in package, package on package, and BGA packages; hybrid, advanced single sided substrate, integrated passive device, high-bandwidth, and fan-out wafer-level packages; IC wire bonding packages; system-in-package products (SiP) and modules; and interconnect materials, as well as assembles automotive electronic products. In addition, the company offers a range of semiconductor testing services, including front-end engineering testing, wafer probing, logic/mixed-signal/RF module and SiP/MEMS/discrete final testing, and test-related services, as well as drop shipment services; and packaging, testing and shipment, and flip-chip and wafer bumping services. Further, it provides electronic manufacturing services in relation to computers, peripherals, communications, industrial, automotive, and storage and server applications; designs, assembles, manufactures, and sells electronic components and telecommunications equipment motherboards; develops, sells, and leases real estate properties; and produces substrates. The company serves customers in communication, computing, and consumer electronic/industrial/automotive sectors. ASE Technology Holding Co., Ltd. was founded in 1984 and is based in Kaohsiung, Taiwan.
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