Head to Head Review: ARM (NASDAQ:ARM) versus Amkor Technology (NASDAQ:AMKR)

ARM (NASDAQ:ARM) and Amkor Technology (NASDAQ:AMKR) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Profitability

This table compares ARM and Amkor Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARM	16.96%	15.56%	11.72%
Amkor Technology	4.77%	7.26%	4.14%

Risk & Volatility

ARM has a beta of 4.1, suggesting that its share price is 310% more volatile than the S&P 500. Comparatively, Amkor Technology has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500.

Earnings & Valuation

This table compares ARM and Amkor Technology”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARM	$4.01 billion	44.78	$792.00 million	$0.66	257.30
Amkor Technology	$6.32 billion	1.26	$354.01 million	$1.25	25.82

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

Institutional and Insider Ownership

7.5% of ARM shares are owned by institutional investors. Comparatively, 42.8% of Amkor Technology shares are owned by institutional investors. 26.9% of Amkor Technology shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for ARM and Amkor Technology, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	0	7	18	1	2.77
Amkor Technology	0	7	4	1	2.50

ARM currently has a consensus price target of $172.80, suggesting a potential upside of 1.75%. Amkor Technology has a consensus price target of $29.63, suggesting a potential downside of 8.22%. Given ARM’s stronger consensus rating and higher possible upside, research analysts clearly believe ARM is more favorable than Amkor Technology.

Summary

ARM beats Amkor Technology on 10 of the 14 factors compared between the two stocks.

About ARM

Arm Holdings Plc engages in the licensing, marketing, research, and development of microprocessors, systems IP, graphics processing units, physical IP and associated systems IP, software, and tools. It operates through the following geographical segments: United Kingdom, United States, and Other Countries. The company was founded on November 12, 1990 and is headquartered in Cambridge, the United Kingdom.

About Amkor Technology

Amkor Technology, Inc. provides outsourced semiconductor packaging and test services in the United States, Japan, Europe, the Middle East, Africa, and the Asia Pacific. It offers turnkey packaging and test services, including semiconductor wafer bump, wafer probe, wafer back-grind, package design, packaging, system-level and final test, and drop shipment services; flip chip scale package products for smartphones, tablets, and other mobile consumer electronic devices; flip chip stacked chip scale packages that are used to stack memory digital baseband, and as applications processors in mobile devices; flip-chip ball grid array packages for various networking, storage, computing, automotive, and consumer applications; and memory products for system memory or platform data storage. The company also provides wafer-level CSP packages for power management, transceivers, sensors, wireless charging, codecs, radar, and specialty silicon; wafer-level fan-out packages used in power management, transceivers, radar, and specialty silicon; silicon wafer integrated fan-out technology that replaces a laminate substrate with a thinner structure; leadframe packages for electronic devices and mixed-signal applications; and substrate-based wirebond packages used to connect a die to a substrate. In addition, it offers micro-electro-mechanical systems packages that are miniaturized mechanical and electromechanical devices; and advanced system-in-package modules used in radio frequency and front end modules, basebands, connectivity, fingerprint sensors, display and touch screen drivers, sensors and MEMS, and NAND memory and solid-state drives. Further, the company provides wafer, package, and system level test services, as well as burn-in test and test development services. It serves integrated device manufacturers, fabless semiconductor companies, original equipment manufacturers, and contract foundries. The company was founded in 1968 and is headquartered in Tempe, Arizona.