Reviewing STMicroelectronics (NYSE:STM) and SiTime (NASDAQ:SITM)

SiTime (NASDAQ:SITM) and STMicroelectronics (NYSE:STM) are both large-cap technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Earnings & Valuation

This table compares SiTime and STMicroelectronics”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SiTime	$326.66 million	42.07	-$42.90 million	$0.94	486.22
STMicroelectronics	$11.80 billion	3.39	$166.00 million	$0.56	79.46

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

Volatility & Risk

SiTime has a beta of 2.88, suggesting that its share price is 188% more volatile than the S&P 500. Comparatively, STMicroelectronics has a beta of 2, suggesting that its share price is 100% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for SiTime and STMicroelectronics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SiTime	1	3	10	2	2.81
STMicroelectronics	0	6	13	0	2.68

SiTime currently has a consensus target price of $687.00, indicating a potential upside of 50.31%. STMicroelectronics has a consensus target price of $75.06, indicating a potential upside of 68.68%. Given STMicroelectronics’ higher probable upside, analysts plainly believe STMicroelectronics is more favorable than SiTime.

Profitability

This table compares SiTime and STMicroelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SiTime	3.87%	13.92%	9.13%
STMicroelectronics	3.80%	4.71%	3.31%

Institutional & Insider Ownership

84.3% of SiTime shares are held by institutional investors. Comparatively, 5.0% of STMicroelectronics shares are held by institutional investors. 1.4% of SiTime shares are held 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.

Summary

SiTime beats STMicroelectronics on 11 of the 15 factors compared between the two stocks.

About SiTime

SiTime Corporation designs, develops, and sells silicon timing systems solutions in Taiwan, Hong Kong, the United States, Singapore, and internationally. The company provides resonators and clock integrated circuits, and various types of oscillators. It serves various markets, including communications, datacenter, enterprise, automotive, industrial, internet of things, mobile, consumer, and aerospace and defense. The company sells its products directly to customers, distributors, and resellers. SiTime Corporation was incorporated in 2003 and is based in Santa Clara, California.

About STMicroelectronics

STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments. The Automotive and Discrete Group segment offers automotive integrated circuits (ICs), and discrete and power transistor products. The Analog, MEMS and Sensors Group segment provides industrial application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs); general purpose analog products; custom analog ICs; wireless charging solutions; galvanic isolated gate drivers; low and high voltage amplifiers, comparators, and current-sense amplifiers; MasterGaN, a solution that integrates a silicon driver and GaN power transistors in a single package; wireline and wireless connectivity ICs; touch screen controllers; micro-electro-mechanical systems (MEMS) products, including sensors or actuators; and optical sensing solutions. The Microcontrollers and Digital ICs Group segment offers general purpose and secure microcontrollers; and radio frequency (RF) products. It also offers application-specific standard products for analog, digital and mixed-signal applications. In addition, the company provides assembly and other services. It sells its products through distributors and retailers, as well as through sales representatives. The company serves automotive, industrial, personal electronics and communications equipment, and computers and peripherals markets. STMicroelectronics N.V. was incorporated in 1987 and is headquartered in Geneva, Switzerland.