Monolithic Power Systems (NASDAQ:MPWR) vs. ON Semiconductor (NASDAQ:ON) Critical Contrast

Monolithic Power Systems (NASDAQ:MPWR) and ON Semiconductor (NASDAQ:ON) are both large-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Valuation & Earnings

This table compares Monolithic Power Systems and ON Semiconductor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monolithic Power Systems	$2.21 billion	16.47	$1.79 billion	$37.67	20.15
ON Semiconductor	$7.08 billion	3.35	$1.57 billion	$1.44	39.44

Monolithic Power Systems has higher earnings, but lower revenue than ON Semiconductor. Monolithic Power Systems is trading at a lower price-to-earnings ratio than ON Semiconductor, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Monolithic Power Systems and ON Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Monolithic Power Systems	76.59%	19.80%	16.79%
ON Semiconductor	9.51%	17.40%	10.72%

Risk & Volatility

Monolithic Power Systems has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, ON Semiconductor has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Monolithic Power Systems and ON Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monolithic Power Systems	0	2	10	0	2.83
ON Semiconductor	0	12	14	0	2.54

Monolithic Power Systems presently has a consensus target price of $789.42, indicating a potential upside of 4.01%. ON Semiconductor has a consensus target price of $56.08, indicating a potential downside of 1.27%. Given Monolithic Power Systems’ stronger consensus rating and higher probable upside, research analysts clearly believe Monolithic Power Systems is more favorable than ON Semiconductor.

Institutional & Insider Ownership

93.5% of Monolithic Power Systems shares are held by institutional investors. Comparatively, 97.7% of ON Semiconductor shares are held by institutional investors. 3.4% of Monolithic Power Systems shares are held by company insiders. Comparatively, 0.3% of ON Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Monolithic Power Systems beats ON Semiconductor on 9 of the 14 factors compared between the two stocks.

About Monolithic Power Systems

Monolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, consumer, communications, and industrial markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as cloud-based CPU servers, server artificial intelligence applications, storage applications, commercial notebooks, digital cockpit, power sources, home appliances, 4G and 5G infrastructure, and satellite communications applications. It offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in computers and notebooks, monitors, car navigation systems, and televisions, as well as for general illumination products. The company sells its products through third-party distributors, value-added resellers, directly to original equipment manufacturers, original design manufacturers, electronic manufacturing service providers, and other end customers. It serves China, Taiwan, South Korea, Europe, Japan, Southeast Asia, the United States, and internationally. Monolithic Power Systems, Inc. was incorporated in 1997 and is headquartered in Kirkland, Washington.

About ON Semiconductor

onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions. The Advanced Solutions Group segment is involved in the designing and developing of analog, mixed-signal, advanced logic, ASSPs and ASICs, Wi-Fi and power solutions for a broad base of end-users in the automotive, consumer, computing, industrial, communications, medical and aerospace/defense markets. The Intelligent Sensing Group segment is focused on the designing and developing of CMOS and CCD image sensors, as well as proximity sensors, image signal processors, single photon detectors, inclu