Rohm (OTCMKTS:ROHCY – Get Free Report) and ARM (NASDAQ:ARM – Get Free Report) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.
Risk & Volatility
Rohm has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, ARM has a beta of 3.4, meaning that its stock price is 240% more volatile than the S&P 500.
Earnings and Valuation
This table compares Rohm and ARM”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rohm | $3.20 billion | 4.12 | -$1.05 billion | ($2.64) | -12.92 |
| ARM | $4.92 billion | 75.86 | $904.00 million | $0.84 | 420.58 |
ARM has higher revenue and earnings than Rohm. Rohm is trading at a lower price-to-earnings ratio than ARM, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and price targets for Rohm and ARM, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rohm | 0 | 1 | 0 | 0 | 2.00 |
| ARM | 1 | 6 | 20 | 0 | 2.70 |
ARM has a consensus price target of $208.79, indicating a potential downside of 40.90%. Given ARM’s stronger consensus rating and higher possible upside, analysts clearly believe ARM is more favorable than Rohm.
Profitability
This table compares Rohm and ARM’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rohm | -31.42% | 3.39% | 2.13% |
| ARM | 18.37% | 12.43% | 9.48% |
Insider and Institutional Ownership
7.5% of ARM shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
ARM beats Rohm on 13 of the 13 factors compared between the two stocks.
About Rohm
ROHM Co., Ltd. manufactures and sells electronic components worldwide. The company operates through three segments: LSI, Semiconductor Devices, and Modules. It provides ICs comprising memory, amplifiers and linear, power management, motor/actuator drivers, resistors, clocks and timers, switches and multiplexers, logic, data converters, sensors and MEMS, display drivers, interfaces, wireless LSIs, audio and video products, speech synthesis LSI, and microcontrollers. The company also offers discrete semiconductor products, such as MOSFETs, bipolar transistors, and diodes; power devices, including power transistors and diodes, SiC power devices, IGBT, and IPM; modules, including optical modules, wireless communication modules, wireless charger modules, and print heads; and opto devices comprising LEDs, LED displays, laser diodes, and optical sensors, as well as foundry services, including thin-film piezoelectric MEMS, wafers, and WL-CSP. Its products are used in industry, automotive, consumer electronics, and telecommunications applications. The company was incorporated in 1940 and is headquartered in Kyoto, Japan.
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.
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