Reviewing Himax (HIMX) & Tower Semiconductor (TSEM)

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Himax (NASDAQ: HIMX) and Tower Semiconductor (NASDAQ:TSEM) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Himax and Tower Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Himax 3.43% 5.53% 3.16%
Tower Semiconductor 20.34% 21.96% 12.90%

Valuation and Earnings

This table compares Himax and Tower Semiconductor’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Himax $685.17 million 1.94 $27.96 million $0.16 48.31
Tower Semiconductor $1.39 billion 1.59 $298.01 million $2.21 10.12

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

Dividends

Himax pays an annual dividend of $0.23 per share and has a dividend yield of 3.0%. Tower Semiconductor pays an annual dividend of $12.35 per share and has a dividend yield of 55.2%. Himax pays out 143.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tower Semiconductor pays out 558.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

24.0% of Himax shares are owned by institutional investors. Comparatively, 47.3% of Tower Semiconductor shares are owned by institutional investors. 1.0% of Tower Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Himax and Tower Semiconductor, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Himax 3 5 6 0 2.21
Tower Semiconductor 0 0 4 0 3.00

Himax currently has a consensus price target of $10.43, indicating a potential upside of 34.97%. Tower Semiconductor has a consensus price target of $39.25, indicating a potential upside of 75.54%. Given Tower Semiconductor’s stronger consensus rating and higher possible upside, analysts plainly believe Tower Semiconductor is more favorable than Himax.

Risk & Volatility

Himax has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500. Comparatively, Tower Semiconductor has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Summary

Tower Semiconductor beats Himax on 12 of the 16 factors compared between the two stocks.

Himax Company Profile

Himax Technologies, Inc., a fabless semiconductor company, provides display imaging processing technologies worldwide. The company operates in two segments, Driver IC and Non-Driver Products. It offers display driver integrated circuits (ICs) and timing controllers used in televisions (TVs), laptops, monitors, mobile phones, tablets, digital cameras, car navigation, and other consumer electronics devices. The company also designs and provides controllers for touch sensor displays; in-cell touch and display driver integration single-chip solutions; LED driver and power management ICs; scaler products for monitors and projectors; tailor-made video processing IC solutions; silicon IPs; and liquid crystal on silicon micro-displays for augmented reality (AR) devices and head-up displays for automotive industry. In addition, it offers digital camera solutions, including complementary metal oxide semiconductor image sensors and wafer level optics for AR devices, 3D sensing, and machine vision, which are used in various applications, such as mobile phone, tablet, laptop, TV, PC camera, automobile, security, medical devices, and Internet on Things. The company markets its display drivers and display-related products to panel manufacturers, agents or distributors, module manufacturers, and assembly houses; and non-driver products to camera module manufacturers, optical engine manufacturers, and television system manufacturers. Himax Technologies, Inc. was founded in 2001 and is headquartered in Tainan City, Taiwan.

Tower Semiconductor Company Profile

Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, Asia, and Europe. The company provides various customizable process technologies, including SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. It also offers transfer optimization and development process services to integrated device manufacturers and fabless companies. The company serves various markets, such as automotive, medical, industrial, consumer, aerospace and defense, and others. Tower Semiconductor Ltd. was founded in 1993 and is headquartered in Migdal Haemek, Israel.

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