Critical Review: Rubicon Technology (NASDAQ:RBCN) vs. Microchip Technology (NASDAQ:MCHP)

Microchip Technology (NASDAQ:MCHP – Get Free Report) and Rubicon Technology (NASDAQ:RBCN – Get Free Report) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Valuation and Earnings

This table compares Microchip Technology and Rubicon Technology”s gross revenue, earnings per share (EPS) and valuation.

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

Insider & Institutional Ownership

91.5% of Microchip Technology shares are owned by institutional investors. Comparatively, 0.0% of Rubicon Technology shares are owned by institutional investors. 2.1% of Microchip Technology shares are owned by insiders. Comparatively, 3.6% of Rubicon Technology shares are owned by 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.

Dividends

Microchip Technology pays an annual dividend of $1.81 per share and has a dividend yield of 2.4%. Rubicon Technology pays an annual dividend of $11.00 per share and has a dividend yield of 846.2%. Microchip Technology pays out 52.2% of its earnings in the form of a dividend. Rubicon Technology pays out 5,789.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Microchip Technology has raised its dividend for 23 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Microchip Technology and Rubicon Technology, as provided by MarketBeat.

Microchip Technology currently has a consensus target price of $97.89, indicating a potential upside of 28.32%. Given Microchip Technology’s higher probable upside, equities research analysts plainly believe Microchip Technology is more favorable than Rubicon Technology.

Volatility & Risk

Microchip Technology has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500. Comparatively, Rubicon Technology has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Profitability

This table compares Microchip Technology and Rubicon Technology’s net margins, return on equity and return on assets.

Summary

Microchip Technology beats Rubicon Technology on 11 of the 16 factors compared between the two stocks.

About Microchip Technology

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Microchip Technology Incorporated engages in the development, manufacture, and sale of smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia. The company offers general purpose 8-bit, 16-bit, and 32-bit mixed-signal microcontrollers; 32-bit embedded mixed-signal microprocessors; and specialized microcontrollers for automotive, industrial, computing, communications, lighting, power supplies, motor control, human machine interface, security, wired connectivity, and wireless connectivity applications. It also provides analog, interface, mixed signal, and timing products comprising power management, linear, mixed-signal, high-voltage, thermal management, discrete diodes, and metal oxide semiconductor field effect transistors (MOSFETS), radio frequency (RF), drivers, safety, security, timing, USB, Ethernet, wireless, and other interface products; field-programmable gate array (FPGA) products; and application development tools that enable system designers to program microcontroller, FPGA, and microprocessor products for specific applications. In addition, the company offers serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, serial static random access memories, and serial electrically erasable random access memories for the production of very small footprint devices; and licenses its SuperFlash embedded flash and non-volatile memory technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate array, RF, analog, and neuromorphic compute products that require embedded non-volatile memory, as well as provides engineering services. Further, it offers wafer foundry and assembly, and test subcontracting manufacturing services; and timing systems products, application specific integrated circuits, and aerospace products. The company was incorporated in 1989 and is headquartered in Chandler, Arizona.

About Rubicon Technology

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Rubicon Technology, Inc. provides monocrystalline sapphire for applications in optical and industrial systems in North America, Asia, and internationally. The company offers optical and industrial sapphire products in various shapes and sizes, including sheets, rods, tubes, core, ingots, and prisms for a range of end markets comprising defense and aerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical, and laser applications. It serves defense subcontractors, industrial manufacturers, fabricators, and resellers. The company was incorporated in 2001 and is based in Bensenville, Illinois.