NVE (NASDAQ: NVEC) and Sigma Designs (NASDAQ:SIGM) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitability, earnings and risk.
Insider & Institutional Ownership
87.1% of NVE shares are owned by institutional investors. Comparatively, 64.8% of Sigma Designs shares are owned by institutional investors. 2.3% of NVE shares are owned by insiders. Comparatively, 4.5% of Sigma Designs shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current ratings for NVE and Sigma Designs, as reported by MarketBeat.
||Strong Buy Ratings
NVE presently has a consensus price target of $79.00, indicating a potential downside of 7.22%. Sigma Designs has a consensus price target of $7.53, indicating a potential upside of 19.44%. Given Sigma Designs’ stronger consensus rating and higher possible upside, analysts clearly believe Sigma Designs is more favorable than NVE.
Earnings & Valuation
This table compares NVE and Sigma Designs’ revenue, earnings per share and valuation.
||Earnings Per Share
NVE has higher earnings, but lower revenue than Sigma Designs.
NVE pays an annual dividend of $4.00 per share and has a dividend yield of 4.7%. Sigma Designs does not pay a dividend. NVE pays out 149.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility and Risk
NVE has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Sigma Designs has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.
This table compares NVE and Sigma Designs’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
NVE beats Sigma Designs on 8 of the 14 factors compared between the two stocks.
NVE Corporation develops and sells devices that use spintronics, a nanotechnology that utilizes electron spin to acquire, store, and transmit information. The company manufactures spintronic products, including sensors and couplers for use in acquiring and transmitting data. Its products comprise standard sensors to detect the presence of a magnetic or metallic material to determine position or speed primarily for the factory automation market; and custom and medical sensors for medical devices to replace electromechanical magnetic switches. The company also offers spintronic couplers, such as IL500-series couplers, IL600-series passive-input couplers, IL700/IL200-series high-speed couplers, IL4/IL3-series isolated network couplers, and IL800-series top-of-the-line couplers. In addition, it licenses the spintronic magnetoresistive random access memory technology, as well as conducts contract research and development activities. The company sells its products through distributors in the United States, Europe, the Middle East, Africa, Asia-Pacific, and internationally. NVE Corporation was founded in 1989 and is headquartered in Eden Prairie, Minnesota.
About Sigma Designs
Sigma Designs, Inc. is a provider of global integrated semiconductor solutions. The Company offers media platforms for use in the home entertainment and home control markets. The Company sells its products into markets, including smart television, media connectivity, set-top box and Internet of Things (IoT) devices. The Company’s media processor product line consists of a range of functionally similar platforms that are based on integrated chips, embedded software and hardware reference designs. The Company’s media connectivity product line consists of wired home networking controller chipsets that are designed to provide connectivity solutions between various home entertainment products and incoming video streams. The Company’s IoT devices product line consists of its wireless Z-Wave chips and modules. The Company is engaged in the license of its internally developed intellectual property. It also offers legacy products that are sold into prosumer and other industrial applications.
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