Skyworks Solutions (NASDAQ:SWKS) and Texas Instruments (NASDAQ:TXN) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.
Profitability
This table compares Skyworks Solutions and Texas Instruments' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Skyworks Solutions | 24.28% | 21.36% | 17.68% |
Texas Instruments | 36.24% | 61.05% | 28.06% |
Insider and Institutional Ownership
76.3% of Skyworks Solutions shares are held by institutional investors. Comparatively, 83.1% of Texas Instruments shares are held by institutional investors. 0.4% of Skyworks Solutions shares are held by company insiders. Comparatively, 0.7% of Texas Instruments shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Skyworks Solutions and Texas Instruments' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Skyworks Solutions | $3.36 billion | 9.02 | $814.80 million | $5.21 | 35.21 |
Texas Instruments | $14.38 billion | 11.89 | $5.02 billion | $5.24 | 35.46 |
Texas Instruments has higher revenue and earnings than Skyworks Solutions. Skyworks Solutions is trading at a lower price-to-earnings ratio than Texas Instruments, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Skyworks Solutions has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Texas Instruments has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.
Dividends
Skyworks Solutions pays an annual dividend of $2.00 per share and has a dividend yield of 1.1%. Texas Instruments pays an annual dividend of $4.08 per share and has a dividend yield of 2.2%. Skyworks Solutions pays out 38.4% of its earnings in the form of a dividend. Texas Instruments pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Skyworks Solutions has increased its dividend for 7 consecutive years and Texas Instruments has increased its dividend for 17 consecutive years. Texas Instruments is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a summary of current ratings and recommmendations for Skyworks Solutions and Texas Instruments, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Skyworks Solutions | 0 | 11 | 17 | 0 | 2.61 |
Texas Instruments | 4 | 8 | 15 | 0 | 2.41 |
Skyworks Solutions currently has a consensus price target of $175.3750, indicating a potential downside of 4.39%. Texas Instruments has a consensus price target of $173.5185, indicating a potential downside of 6.61%. Given Skyworks Solutions' stronger consensus rating and higher possible upside, equities analysts plainly believe Skyworks Solutions is more favorable than Texas Instruments.
Summary
Texas Instruments beats Skyworks Solutions on 11 of the 17 factors compared between the two stocks.