Critical Analysis: Cirrus Logic (NASDAQ:CRUS) and United Microelectronics (NYSE:UMC)

Cirrus Logic (NASDAQ:CRUS) and United Microelectronics (NYSE:UMC) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current ratings for Cirrus Logic and United Microelectronics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cirrus Logic	0	2	5	0	2.71
United Microelectronics	0	4	1	0	2.20

Cirrus Logic currently has a consensus price target of $132.50, indicating a potential upside of 31.11%. United Microelectronics has a consensus price target of $7.40, indicating a potential upside of 6.55%. Given Cirrus Logic’s stronger consensus rating and higher probable upside, analysts clearly believe Cirrus Logic is more favorable than United Microelectronics.

Volatility and Risk

Cirrus Logic has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, United Microelectronics has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Valuation & Earnings

This table compares Cirrus Logic and United Microelectronics”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cirrus Logic	$1.79 billion	3.00	$274.57 million	$5.90	17.13
United Microelectronics	$7.25 billion	2.40	$1.95 billion	$0.65	10.68

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

Institutional and Insider Ownership

88.0% of Cirrus Logic shares are owned by institutional investors. Comparatively, 5.1% of United Microelectronics shares are owned by institutional investors. 1.0% of Cirrus Logic shares are owned by insiders. Comparatively, 8.0% of United Microelectronics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Cirrus Logic and United Microelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cirrus Logic	17.19%	18.15%	14.80%
United Microelectronics	22.89%	14.35%	9.13%

Summary

Cirrus Logic beats United Microelectronics on 9 of the 14 factors compared between the two stocks.

About Cirrus Logic

Cirrus Logic, Inc., a fabless semiconductor company, develops low-power high-precision mixed-signal processing solutions in China, the United States, and internationally. The company offers audio products, including amplifiers; codecs components that integrate analog-to-digital converters (ADCs) and digital-to-analog converters (DACs) into a single integrated circuit (IC); smart codecs, a codec with integrated digital signal processing; standalone digital signal processors; and SoundClear technology, which consists of a portfolio of tools, software, and algorithms that helps to enhance user experience with features, such as louder, high-fidelity sound, audio playback, voice capture, and hearing augmentation for use in smartphones, tablets, laptops, AR/VR headsets, home theater systems, automotive entertainment systems, and professional audio systems. It also provides high-performance mixed-signal products comprising camera controllers, haptic and sensing solutions, and battery and power ICs for use in smartphones, as well as legacy industrial and energy applications, such as digital utility meters, power supplies, energy control, energy measurement, and energy exploration. The company markets and sells its products through direct sales force, external sales representatives, and distributors. Cirrus Logic, Inc. was incorporated in 1984 and is headquartered in Austin, Texas.

About United Microelectronics

United Microelectronics Corporation operates as a semiconductor wafer foundry in Taiwan, China, Hong Kong, Japan, Korea, the United States, Europe, and internationally. The company provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. It serves fabless design companies and integrated device manufacturers. United Microelectronics Corporation was incorporated in 1980 and is headquartered in Hsinchu City, Taiwan.