Monolithic Power Systems (NASDAQ:MPWR – Get Free Report) and Canaan (NASDAQ:CAN – Get Free Report) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.
Profitability
This table compares Monolithic Power Systems and Canaan’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Monolithic Power Systems | 21.29% | 20.44% | 16.93% |
| Canaan | -128.85% | -60.37% | -42.71% |
Institutional and Insider Ownership
93.5% of Monolithic Power Systems shares are owned by institutional investors. Comparatively, 70.1% of Canaan shares are owned by institutional investors. 3.7% of Monolithic Power Systems shares are owned by company insiders. Comparatively, 0.3% of Canaan shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Monolithic Power Systems | 0 | 2 | 10 | 0 | 2.83 |
| Canaan | 0 | 1 | 3 | 0 | 2.75 |
Monolithic Power Systems presently has a consensus price target of $828.67, indicating a potential upside of 35.25%. Canaan has a consensus price target of $3.00, indicating a potential upside of 34.53%. Given Monolithic Power Systems’ stronger consensus rating and higher possible upside, research analysts plainly believe Monolithic Power Systems is more favorable than Canaan.
Volatility and Risk
Monolithic Power Systems has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, Canaan has a beta of 3.24, indicating that its stock price is 224% more volatile than the S&P 500.
Earnings and Valuation
This table compares Monolithic Power Systems and Canaan”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Monolithic Power Systems | $2.04 billion | 14.65 | $427.37 million | $8.87 | 69.08 |
| Canaan | $229.63 million | 2.73 | -$414.15 million | ($1.35) | -1.65 |
Monolithic Power Systems has higher revenue and earnings than Canaan. Canaan is trading at a lower price-to-earnings ratio than Monolithic Power Systems, indicating that it is currently the more affordable of the two stocks.
Summary
Monolithic Power Systems beats Canaan on 13 of the 14 factors compared between the two stocks.
About Monolithic Power Systems
Monolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, consumer, communications, and industrial markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as cloud-based CPU servers, server artificial intelligence applications, storage applications, commercial notebooks, digital cockpit, power sources, home appliances, 4G and 5G infrastructure, and satellite communications applications. It offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in computers and notebooks, monitors, car navigation systems, and televisions, as well as for general illumination products. The company sells its products through third-party distributors, value-added resellers, directly to original equipment manufacturers, original design manufacturers, electronic manufacturing service providers, and other end customers. It serves China, Taiwan, South Korea, Europe, Japan, Southeast Asia, the United States, and internationally. Monolithic Power Systems, Inc. was incorporated in 1997 and is headquartered in Kirkland, Washington.
About Canaan
Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components in the People's Republic of China. It is also involved in the assembly and distribution of mining equipment and spare parts. The company has operations in the United States, Australia, Kazakhstan, Hong Kong, Canada, Mainland China, Thailand, Sweden, and internationally. Canaan Inc. was founded in 2013 and is based in Singapore.
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