Tower Semiconductor (NASDAQ:TSEM) and NXP Semiconductors (NASDAQ:NXPI) Head-To-Head Review

Tower Semiconductor (NASDAQ:TSEM) and NXP Semiconductors (NASDAQ:NXPI) are both large-cap technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Tower Semiconductor and NXP Semiconductors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tower Semiconductor	0	2	7	1	2.90
NXP Semiconductors	1	9	16	0	2.58

Tower Semiconductor presently has a consensus price target of $316.00, indicating a potential upside of 61.57%. NXP Semiconductors has a consensus price target of $304.91, indicating a potential upside of 32.96%. Given Tower Semiconductor’s stronger consensus rating and higher possible upside, analysts clearly believe Tower Semiconductor is more favorable than NXP Semiconductors.

Profitability

This table compares Tower Semiconductor and NXP Semiconductors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tower Semiconductor	16.94%	9.83%	8.25%
NXP Semiconductors	22.56%	27.83%	11.07%

Risk and Volatility

Tower Semiconductor has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, NXP Semiconductors has a beta of 1.8, meaning that its stock price is 80% more volatile than the S&P 500.

Institutional and Insider Ownership

70.5% of Tower Semiconductor shares are held by institutional investors. Comparatively, 90.5% of NXP Semiconductors shares are held by institutional investors. 1.0% of Tower Semiconductor shares are held by company insiders. Comparatively, 0.1% of NXP Semiconductors 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.

Earnings and Valuation

This table compares Tower Semiconductor and NXP Semiconductors”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tower Semiconductor	$1.71 billion	12.86	$220.47 million	$2.53	77.30
NXP Semiconductors	$13.19 billion	4.39	$2.02 billion	$11.72	19.57

NXP Semiconductors has higher revenue and earnings than Tower Semiconductor. NXP Semiconductors is trading at a lower price-to-earnings ratio than Tower Semiconductor, indicating that it is currently the more affordable of the two stocks.

Summary

NXP Semiconductors beats Tower Semiconductor on 9 of the 15 factors compared between the two stocks.

About Tower Semiconductor

Tower Semiconductor Ltd., an independent semiconductor foundry, focus on specialty process technologies to manufacture analog intensive mixed-signal semiconductor devices in Israel, the United States, Japan, Europe, and internationally. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The Company also provides design enablement platform for quick and accurate design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.

About NXP Semiconductors

NXP Semiconductors N.V. offers various semiconductor products. The company's product portfolio includes microcontrollers; application processors, including i.MX application processors, and i.MX 8 and 9 family of applications processors; communication processors; wireless connectivity solutions, such as near field communications, ultra-wideband, Bluetooth low-energy, Zigbee, and Wi-Fi and Wi-Fi/Bluetooth integrated SoCs; analog and interface devices; radio frequency power amplifiers; and security controllers, as well as semiconductor-based environmental and inertial sensors, including pressure, inertial, magnetic, and gyroscopic sensors. Its products are used in various applications, including automotive, industrial and Internet of Things, mobile, and communication infrastructure. The company markets its products to various original equipment manufacturers, contract manufacturers, and distributors. It operates in China, the Netherlands, the United States, Singapore, Germany, Japan, South Korea, Taiwan, and internationally. N.V. was incorporated in 2006 and is headquartered in Eindhoven, the Netherlands.