Cypress Semiconductor (CY) and Cree (CREE) Head to Head Survey

Cypress Semiconductor (NASDAQ: CY) and Cree (NASDAQ:CREE) are both mid-cap technology companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Insider and Institutional Ownership

97.4% of Cypress Semiconductor shares are owned by institutional investors. Comparatively, 98.7% of Cree shares are owned by institutional investors. 0.7% of Cypress Semiconductor shares are owned by company insiders. Comparatively, 1.1% of Cree shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Cypress Semiconductor and Cree, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cypress Semiconductor 1 3 10 0 2.64
Cree 5 7 3 0 1.87

Cypress Semiconductor presently has a consensus target price of $18.19, suggesting a potential upside of 6.57%. Cree has a consensus target price of $28.81, suggesting a potential downside of 21.80%. Given Cypress Semiconductor’s stronger consensus rating and higher probable upside, research analysts plainly believe Cypress Semiconductor is more favorable than Cree.

Profitability

This table compares Cypress Semiconductor and Cree’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cypress Semiconductor 2.64% 2.40% 1.72%
Cree -8.42% -0.44% -0.37%

Earnings and Valuation

This table compares Cypress Semiconductor and Cree’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cypress Semiconductor $1.92 billion 2.96 -$686.25 million ($0.40) -42.68
Cree $1.47 billion 2.45 -$98.11 million ($1.22) -30.20

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

Dividends

Cypress Semiconductor pays an annual dividend of $0.44 per share and has a dividend yield of 2.6%. Cree does not pay a dividend. Cypress Semiconductor pays out -110.0% of its earnings in the form of a dividend.

Volatility and Risk

Cypress Semiconductor has a beta of 2.01, meaning that its stock price is 101% more volatile than the S&P 500. Comparatively, Cree has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Summary

Cypress Semiconductor beats Cree on 12 of the 16 factors compared between the two stocks.

About Cypress Semiconductor

Cypress Semiconductor Corporation manufactures embedded system solutions for automotive, industrial, home automation and appliances, consumer electronics and medical products. The Company’s segments include Microcontroller and Connectivity Division (MCD), and Memory Products Division (MPD). MCD focuses on microcontroller (MCU), analog and wireless and wired connectivity solutions. MPD focuses on parallel and serial NOR flash memories, NAND flash memories, static random access memory (SRAM), ferroelectric-random access memory (F-RAM) ferroelectric memory devices and other specialty memories. The Company’s products include Traveo MCUs and Flexible MCUs; PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP; CapSense, and TrueTouch Analog Power Management integrated circuits (PMICs) and energy harvesting solutions.

About Cree

Cree, Inc. is a manufacturer of lighting-class light emitting diode (LED) products, lighting products and semiconductor products for power and radio-frequency (RF) applications. The Company’s products are focused for applications, such as indoor and outdoor lighting, video displays, transportation, electronic signs and signals, power supplies, inverters and wireless systems. The Company has three segments: Lighting Products, LED Products, and Power and RF Products. The Company’s Lighting Products segment offers LED lighting systems and bulbs. The Company’s LED Products segment offers LED components, LED chips and silicon carbide (SiC) materials. The Company’s Power and RF Products segment offers power devices and RF devices. The Company designs, manufactures and markets lighting systems for indoor and outdoor applications, with a focus on LED lighting systems for the commercial, industrial and consumer markets.

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