Nvidia (NVDA) vs. United Microelectronics (UMC) Critical Comparison

United Microelectronics (NYSE: UMC) and Nvidia (NASDAQ:NVDA) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, profitability, valuation, earnings and risk.

Analyst Ratings

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This is a breakdown of current ratings for United Microelectronics and Nvidia, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Microelectronics 7 1 1 0 1.33
Nvidia 4 12 21 0 2.46

United Microelectronics currently has a consensus price target of $2.10, suggesting a potential downside of 18.92%. Nvidia has a consensus price target of $213.12, suggesting a potential downside of 7.98%. Given Nvidia’s stronger consensus rating and higher probable upside, analysts clearly believe Nvidia is more favorable than United Microelectronics.

Profitability

This table compares United Microelectronics and Nvidia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Microelectronics 6.43% 4.48% 2.51%
Nvidia 31.36% 45.02% 29.27%

Risk and Volatility

United Microelectronics has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500. Comparatively, Nvidia has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500.

Insider and Institutional Ownership

5.8% of United Microelectronics shares are held by institutional investors. Comparatively, 66.9% of Nvidia shares are held by institutional investors. 8.0% of United Microelectronics shares are held by company insiders. Comparatively, 5.8% of Nvidia shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares United Microelectronics and Nvidia’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Microelectronics $5.01 billion 1.26 $323.00 million N/A N/A
Nvidia $9.71 billion 14.42 $3.05 billion $4.67 49.59

Nvidia has higher revenue and earnings than United Microelectronics.

Dividends

United Microelectronics pays an annual dividend of $0.06 per share and has a dividend yield of 2.3%. Nvidia pays an annual dividend of $0.60 per share and has a dividend yield of 0.3%. Nvidia pays out 12.8% of its earnings in the form of a dividend.

Summary

Nvidia beats United Microelectronics on 12 of the 15 factors compared between the two stocks.

About United Microelectronics

United Microelectronics Corporation provides semiconductor wafer foundry solutions. It provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. The company also engages in the research, development, and manufacture of products in the solar energy and LED industries. It primarily serves fabless design companies and integrated device manufacturers. The company operates primarily in Taiwan, Singapore, China, Japan, Europe, and the United States. United Microelectronics Corporation was founded in 1980 and is headquartered in Hsinchu, Taiwan.

About Nvidia

NVIDIA Corporation operates as a visual computing company worldwide. It operates through two segments, GPU and Tegra Processor. The GPU segment offers processors, which include GeForce for PC gaming and mainstream PCs; GeForce NOW for cloud-based game-streaming service; Quadro for design professionals working in computer-aided design, video editing, special effects, and other creative applications; Tesla for AI utilizing deep learning, accelerated computing, and general purpose computing; GRID provides power of NVIDIA graphics through the cloud and datacenters; DGX for AI scientists, researchers, and developers; and cryptocurrency-specific graphics processing units. The Tegra Processor segment provides processors designed to enable branded platforms – DRIVE and SHIELD; DRIVE automotive computers and software stacks, which offer self-driving capabilities; SHIELD devices and services designed for mobile-cloud in home entertainment, AI, and gaming applications; and Jetson TX 2, an AI computing platform for embedded use. The company's products are used in gaming, professional visualization, datacenter, and automotive markets. NVIDIA Corporation sells its products to original equipment manufacturers, original device manufacturers, system builders, add-in board manufacturers, retailers/distributors, Internet and cloud service providers, automotive manufacturers and tier-1 automotive suppliers, mapping companies, start-ups, and other ecosystem participants. NVIDIA Corporation was founded in 1993 and is headquartered in Santa Clara, California.

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