Skyworks Solutions (NASDAQ:SWKS) versus RF Industries (NASDAQ:RFIL) Critical Analysis

Skyworks Solutions (NASDAQ:SWKS) and RF Industries (NASDAQ:RFIL) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Earnings & Valuation

This table compares Skyworks Solutions and RF Industries”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Skyworks Solutions	$4.18 billion	2.75	$596.00 million	$2.55	29.99
RF Industries	$73.40 million	0.97	-$6.60 million	($0.13)	-51.15

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

Volatility & Risk

Skyworks Solutions has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, RF Industries has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Profitability

This table compares Skyworks Solutions and RF Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Skyworks Solutions	10.43%	11.53%	8.81%
RF Industries	-1.95%	1.63%	0.78%

Dividends

Skyworks Solutions pays an annual dividend of $2.80 per share and has a dividend yield of 3.7%. RF Industries pays an annual dividend of $0.08 per share and has a dividend yield of 1.2%. Skyworks Solutions pays out 109.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RF Industries pays out -61.5% of its earnings in the form of a dividend. Skyworks Solutions has raised its dividend for 11 consecutive years. Skyworks Solutions is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Skyworks Solutions and RF Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Skyworks Solutions	3	16	1	0	1.90
RF Industries	0	0	1	0	3.00

Skyworks Solutions currently has a consensus target price of $79.06, suggesting a potential upside of 3.36%. RF Industries has a consensus target price of $4.50, suggesting a potential downside of 32.33%. Given Skyworks Solutions’ higher possible upside, equities analysts clearly believe Skyworks Solutions is more favorable than RF Industries.

Insider & Institutional Ownership

85.4% of Skyworks Solutions shares are owned by institutional investors. Comparatively, 23.5% of RF Industries shares are owned by institutional investors. 0.3% of Skyworks Solutions shares are owned by company insiders. Comparatively, 15.7% of RF Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Skyworks Solutions beats RF Industries on 13 of the 16 factors compared between the two stocks.

About Skyworks Solutions

Skyworks Solutions, Inc., together with its subsidiaries, designs, develops, manufactures, and markets proprietary semiconductor products in the United States, China, South Korea, Taiwan, Europe, the Middle East, Africa, and the rest of Asia-Pacific. Its product portfolio includes amplifiers, antenna tuners, attenuators, automotive tuners and digital radios, DC/DC converters, demodulators, detectors, diodes, wireless analog system on chip products, directional couplers, diversity receive modules, filters, front-end modules, hybrids, light emitting diode drivers, low noise amplifiers, mixers, modulators, optocouplers/optoisolators, phase locked loops, phase shifters, power dividers/combiners, power over ethernet, power isolators, receivers, switches, synthesizers, timing devices, voltage controlled oscillators/synthesizers, and voltage regulators. The company products are the used in aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, military, smartphone, tablet, and wearable markets. It sells its products through direct sales force, electronic component distributors, and independent sales representatives. Skyworks Solutions, Inc. was founded in 1962 and is based in Irvine, California.

About RF Industries

RF Industries, Ltd., together with its subsidiaries, designs, manufactures, and markets interconnect products and systems in the United States, Canada, Italy, Mexico, and internationally. The company operates through two segments, RF Connector and Cable Assembly, and Custom Cabling Manufacturing and Assembly. The company designs, manufactures, and distributes various coaxial connectors and cable assemblies that are integrated with coaxial connectors; custom copper and fiber cable assemblies, complex hybrid fiber optic and power solution cables, adapters, and electromechanical wiring harnesses for communication, computer, LAN, automotive, and medical equipment; energy-efficient cooling systems for wireless base stations and remote equipment shelters; and custom-designed pole-ready 5G small cell integrated enclosures. It also designs and manufactures cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation, medical, and military customers; connectivity solutions to telecommunications and data communications distributors; thermal control systems; and radio frequency and microwave distribution system products, such as dividers, directional couplers, and filters. The company sells its products through warehousing distributors and in-house marketing and sales team. It serves telecommunications carriers and equipment manufacturers, wireless and network infrastructure carriers, and original equipment manufacturers. The company was formerly known as Celltronics, Inc. and changed its name RF Industries, Ltd. in November 1990. RF Industries, Ltd. was incorporated in 1979 and is headquartered in San Diego, California.