Head-To-Head Review: MediaTek (OTCMKTS:MDTKF) versus Microchip Technology (NASDAQ:MCHP)

Microchip Technology (NASDAQ:MCHP) and MediaTek (OTCMKTS:MDTKF) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

91.5% of Microchip Technology shares are held by institutional investors. 2.1% of Microchip Technology shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Microchip Technology	0	4	15	0	2.79
MediaTek	0	0	0	0	N/A

Microchip Technology currently has a consensus price target of $99.95, suggesting a potential upside of 21.65%. Given Microchip Technology’s higher probable upside, equities research analysts plainly believe Microchip Technology is more favorable than MediaTek.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Microchip Technology	20.80%	27.82%	11.85%
MediaTek	N/A	N/A	N/A

Valuation & Earnings

This table compares Microchip Technology and MediaTek’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Microchip Technology	$6.59 billion	6.69	$1.91 billion	$3.47	23.68
MediaTek	N/A	N/A	N/A	N/A	N/A

Microchip Technology has higher revenue and earnings than MediaTek.

Summary

Microchip Technology beats MediaTek on 8 of the 8 factors compared between the two stocks.

About Microchip Technology

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 MediaTek

MediaTek Inc. researches, develops, produces, and markets integrated circuits (ICs) worldwide. It provides multimedia, computer peripherals oriented, consumer-oriented, and other application ICs. The company offers products for smartphones, such as MediaTek Helio chipsets; octa-core and quad-core system-on-chips (SoC); 32-bit chipsets; and SOCs for Google Mobile Service Express. It also provides tablet chipsets that are used in enterprise systems; streaming and traditional audio products for connected audio systems, sound bars, and other applications; chipsets for ultra high definition 4K Blu-ray, Blu-ray and DVD players, and set top boxes; multi-core smart TV SoCs and chipset for digital TVs; and products for optical disk drives. In addition, the company offers home networking and broadband Wi-Fi products, which are used in PCs, broadband gateways, digital TVs, Blu-ray players, IPTV set-top boxes, and web cams; and automotive solutions, such as mmWave radar sensors, telematics solutions, vision advanced driver systems, and in-vehicle infotainment systems. Further, it provides chipsets for location intelligence, wearable products, smart home solutions, and machine to machine applications; and Narrow-Band Internet of Things (IoT), a 3GPP standardized cellular based low power wide area technology. Additionally, the company is involved in the provision of software and hardware design, development, test, maintenance and repair, and technological consultation services; import and export of its products; sale and delegation of patents and circuit layout rights for its products; and investment activity. It also provides research, marketing, management, and technology services. The company was founded in 1997 and is headquartered in Hsinchu, Taiwan.