Analyzing ASE Technology (ASX) and Magnachip Semiconductor (MX)

ASE Technology (NYSE:ASX) and Magnachip Semiconductor (NYSE:MX) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Profitability

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This table compares ASE Technology and Magnachip Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ASE Technology	6.83%	11.81%	5.10%
Magnachip Semiconductor	5.65%	-108.44%	5.65%

Earnings & Valuation

This table compares ASE Technology and Magnachip Semiconductor’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ASE Technology	$12.34 billion	0.67	$838.69 million	$0.39	9.77
Magnachip Semiconductor	$679.67 million	0.35	$84.93 million	$0.76	8.97

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

Risk and Volatility

ASE Technology has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Magnachip Semiconductor has a beta of 0.35, indicating that its stock price is 65% less volatile than the S&P 500.

Insider and Institutional Ownership

5.5% of ASE Technology shares are owned by institutional investors. Comparatively, 86.9% of Magnachip Semiconductor shares are owned by institutional investors. 22.9% of ASE Technology shares are owned by company insiders. Comparatively, 5.4% of Magnachip Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for ASE Technology and Magnachip Semiconductor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ASE Technology	2	1	0	0	1.33
Magnachip Semiconductor	0	1	2	0	2.67

Magnachip Semiconductor has a consensus target price of $10.80, suggesting a potential upside of 58.36%. Given Magnachip Semiconductor’s stronger consensus rating and higher possible upside, analysts plainly believe Magnachip Semiconductor is more favorable than ASE Technology.

Summary

ASE Technology beats Magnachip Semiconductor on 8 of the 14 factors compared between the two stocks.

About ASE Technology

ASE Technology Holding Co., Ltd. provides a range of semiconductors packaging and testing, and electronic manufacturing services (EMS) in the United States, Taiwan, Asia, Europe, and internationally. The company offers packaging services, including flip-chip ball grid array (BGA), flip-chip chip scale package (fcCSP), advanced chip scale packages (aCSP), quad flat packages, thin quad flat packages, bump chip carrier and quad flat no-lead (QFN) packages, advanced QFN packages, plastic BGAs, high-band package on package, and 3D chip packages; stacked die solutions in various package types; and copper wire and silver bonding solutions, as well as module-based solutions. It also provides advanced packages, including aCSP; fcCSP; flip-chip package in package, package on package, and BGA packages; hybrid, advanced single sided substrate, integrated passive device, high-bandwidth, and fan-out wafer-level packages; IC wire bonding packages; system-in-package products (SiP) and modules; and interconnect materials, as well as assembles automotive electronic products. In addition, the company offers a range of semiconductor testing services, including front-end engineering testing, wafer probing, logic/mixed-signal/RF module and SiP/MEMS/discrete final testing, and test-related services, as well as drop shipment services; and packaging, testing and shipment, and flip-chip and wafer bumping services. Further, it provides electronic manufacturing services in relation to computers, peripherals, communications, industrial, automotive, and storage and server applications; designs, assembles, manufactures, and sells electronic components and telecommunications equipment motherboards; develops, sells, and leases real estate properties; and produces substrates. The company serves customers in communication, computing, and consumer electronic/industrial/automotive sectors. ASE Technology Holding Co., Ltd. was founded in 1984 and is based in Kaohsiung, Taiwan.

About Magnachip Semiconductor

MagnaChip Semiconductor Corporation, together with its subsidiaries, designs, manufactures, and sells analog and mixed-signal semiconductor platform solutions for communications, Internet of Things, consumer, industrial, and automotive applications. The company operates through two segments, Foundry Services Group and Standard Products Group. The Foundry Services Group segment provides analog and mixed-signal foundry services for fabless and integrated device manufacturer semiconductor companies to manufacture a range of products, including display drivers, light emitting diode (LED) drivers, audio encoding and decoding devices, microcontrollers, touch screen controllers, RF switches, park distance control sensors for automotive, electronic tag memories, and power management semiconductors. The Standard Products Group segment offers display solutions, including source and gate drivers, and timing controllers that cover a range of flat panel displays used in ultra-high definition, high definition, full high definition, LED, 3D and organic light emitting diodes televisions and displays, notebooks, and mobile communications and entertainment devices. This segment also offers power management semiconductor products, such as metal oxide semiconductor field effect transistors, insulated gate bipolar mode transistors, converters, LED drivers, SSD PMIC products, and switching and linear regulators for televisions, smartphones, mobile phones, desktop PCs, notebooks, tablet PCs, other consumer electronics, and consumer appliances, as well as for industrial applications. It serves consumer, computing, and industrial electronics original equipment manufacturers; original design manufacturers; and electronics manufacturing services companies, as well as subsystem designers. The company sells its products through direct sales force, as well as through a network of agents and distributors worldwide. MagnaChip Semiconductor Corporation is based in Luxembourg City, Luxembourg.