Financial Comparison: Onsemi (NASDAQ:ON) vs. GlobalFoundries (NASDAQ:GFS)

GlobalFoundries (NASDAQ:GFS) and Onsemi (NASDAQ:ON) are both large-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

This is a summary of recent ratings and recommmendations for GlobalFoundries and Onsemi, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GlobalFoundries	0	5	6	0	2.55
Onsemi	0	10	13	0	2.57

GlobalFoundries presently has a consensus price target of $47.09, indicating a potential upside of 20.68%. Onsemi has a consensus price target of $54.12, indicating a potential upside of 21.29%. Given Onsemi’s stronger consensus rating and higher possible upside, analysts clearly believe Onsemi is more favorable than GlobalFoundries.

Insider & Institutional Ownership

97.7% of Onsemi shares are owned by institutional investors. 0.3% of Onsemi shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares GlobalFoundries and Onsemi”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GlobalFoundries	$6.79 billion	3.18	-$265.00 million	($0.34)	-114.76
Onsemi	$6.67 billion	2.80	$1.57 billion	$1.44	30.99

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

Volatility and Risk

GlobalFoundries has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500. Comparatively, Onsemi has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500.

Profitability

This table compares GlobalFoundries and Onsemi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GlobalFoundries	-3.93%	6.05%	3.82%
Onsemi	22.21%	20.10%	12.36%

Summary

Onsemi beats GlobalFoundries on 11 of the 14 factors compared between the two stocks.

About GlobalFoundries

GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.

About Onsemi

onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions. The Advanced Solutions Group segment is involved in the designing and developing of analog, mixed-signal, advanced logic, ASSPs and ASICs, Wi-Fi and power solutions for a broad base of end-users in the automotive, consumer, computing, industrial, communications, medical and aerospace/defense markets. The Intelligent Sensing Group segment is focused on the designing and developing of CMOS and CCD image sensors, as well as proximity sensors, image signal processors, single photon detectors, inclu