Cohu (NASDAQ:COHU – Get Free Report) and Monolithic Power Systems (NASDAQ:MPWR – Get Free Report) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.
Profitability
This table compares Cohu and Monolithic Power Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cohu | -7.43% | -1.96% | -1.30% |
| Monolithic Power Systems | 24.41% | 22.31% | 18.67% |
Dividends
Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Monolithic Power Systems pays an annual dividend of $8.00 per share and has a dividend yield of 0.6%. Cohu pays out -28.9% of its earnings in the form of a dividend. Monolithic Power Systems pays out 49.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Monolithic Power Systems has raised its dividend for 8 consecutive years. Monolithic Power Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
Volatility and Risk
Cohu has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500. Comparatively, Monolithic Power Systems has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500.
Valuation & Earnings
This table compares Cohu and Monolithic Power Systems”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cohu | $522.60 million | 5.84 | -$74.27 million | ($0.83) | -77.69 |
| Monolithic Power Systems | $3.27 billion | 20.35 | $621.48 million | $16.31 | 83.11 |
Monolithic Power Systems has higher revenue and earnings than Cohu. Cohu is trading at a lower price-to-earnings ratio than Monolithic Power Systems, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings for Cohu and Monolithic Power Systems, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cohu | 1 | 1 | 7 | 1 | 2.80 |
| Monolithic Power Systems | 0 | 2 | 12 | 1 | 2.93 |
Cohu currently has a consensus target price of $68.75, suggesting a potential upside of 6.62%. Monolithic Power Systems has a consensus target price of $1,731.42, suggesting a potential upside of 27.74%. Given Monolithic Power Systems’ stronger consensus rating and higher possible upside, analysts plainly believe Monolithic Power Systems is more favorable than Cohu.
Summary
Monolithic Power Systems beats Cohu on 15 of the 17 factors compared between the two stocks.
About Cohu
Cohu, Inc., through its subsidiaries, provides semiconductor test equipment and services in China, the United States, Taiwan, Malaysia, the Philippines, and internationally. The company supplies semiconductor test and inspection handlers, micro-electromechanical system (MEMS) test modules, test contactors, thermal sub-systems, and semiconductor automated test equipment for semiconductor manufacturers and test subcontractors. It also provides semiconductor automated test equipment for wafer level and device package testing; various test handlers, including pick-and-place, turret, gravity, strip, and MEMS and thermal sub-systems; interface products comprising test contactors, and probe heads and pins; spares and kits; various parts and labor warranties on test and handling systems, and instruments; and training on the maintenance and operation of its systems, as well as application, data management software, and consulting services on its products. In addition, the company offers data analytics product that includes DI-Core, a software suite used to optimize Cohu equipment performance, which provides real-time online performance monitoring and process control. It markets its products through direct sales force and independent sales representatives. The company was formerly known as Cohu Electronics, Inc. and changed its name to Cohu, Inc. in 1972. The company was incorporated in 1947 and is headquartered in Poway, California.
About Monolithic Power Systems
Monolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, consumer, communications, and industrial markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as cloud-based CPU servers, server artificial intelligence applications, storage applications, commercial notebooks, digital cockpit, power sources, home appliances, 4G and 5G infrastructure, and satellite communications applications. It offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in computers and notebooks, monitors, car navigation systems, and televisions, as well as for general illumination products. The company sells its products through third-party distributors, value-added resellers, directly to original equipment manufacturers, original design manufacturers, electronic manufacturing service providers, and other end customers. It serves China, Taiwan, South Korea, Europe, Japan, Southeast Asia, the United States, and internationally. Monolithic Power Systems, Inc. was incorporated in 1997 and is headquartered in Kirkland, Washington.
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