Critical Survey: Cabot Microelectronics (NASDAQ:CCMP) & Xperi (NASDAQ:XPER)

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Cabot Microelectronics (NASDAQ:CCMP) and Xperi (NASDAQ:XPER) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.

Earnings & Valuation

This table compares Cabot Microelectronics and Xperi’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cabot Microelectronics $590.12 million 7.69 $110.04 million $5.22 29.95
Xperi $406.13 million 2.61 -$280,000.00 $2.48 8.65

Cabot Microelectronics has higher revenue and earnings than Xperi. Xperi is trading at a lower price-to-earnings ratio than Cabot Microelectronics, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Cabot Microelectronics has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Xperi has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Cabot Microelectronics and Xperi, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cabot Microelectronics 0 1 4 0 2.80
Xperi 0 0 4 0 3.00

Cabot Microelectronics currently has a consensus target price of $141.50, suggesting a potential downside of 9.49%. Xperi has a consensus target price of $31.50, suggesting a potential upside of 46.78%. Given Xperi’s stronger consensus rating and higher probable upside, analysts clearly believe Xperi is more favorable than Cabot Microelectronics.

Profitability

This table compares Cabot Microelectronics and Xperi’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cabot Microelectronics 11.76% 21.77% 11.89%
Xperi 7.37% 22.90% 11.61%

Institutional & Insider Ownership

99.6% of Cabot Microelectronics shares are held by institutional investors. Comparatively, 96.7% of Xperi shares are held by institutional investors. 2.2% of Cabot Microelectronics shares are held by insiders. Comparatively, 1.8% of Xperi shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Cabot Microelectronics pays an annual dividend of $1.68 per share and has a dividend yield of 1.1%. Xperi pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. Cabot Microelectronics pays out 32.2% of its earnings in the form of a dividend. Xperi pays out 32.3% 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.

Summary

Cabot Microelectronics beats Xperi on 11 of the 15 factors compared between the two stocks.

About Cabot Microelectronics

Cabot Microelectronics Corp. engages in the development, manufacture, and sale of chemical mechanical planarization consumables products. The firm offers chemical mechanical planarization slurries for polishing many of the conducting, insulating and isolating materials used in integrated circuit devices, and for polishing the disk substrates and magnetic heads used in hard disk drives. It also develops, manufactures and sells chemical mechanical planarization polishing pads, which are used in conjunction with slurries in the chemical mechanical planarization process. The company was founded by William P. Noglows in October 1999 and is headquartered in Aurora, IL.

About Xperi

Xperi Corporation, through its subsidiaries, creates, develops, and licenses audio, imaging, semiconductor packaging, and interconnect technologies in the United States, South Korea, Taiwan, Japan, Europe, the Middle East, and internationally. The company operates in two segments, Product Licensing; and Semiconductor and IP Licensing. The Product Licensing segment licenses technologies and intellectual property related to audio, digital radio, and imaging solutions under the DTS, FotoNation, HD Radio, and IMAX Enhanced brands. It delivers software and hardware based solutions combined with various other intellectual property to its customers or to their suppliers. This segment serves consumer electronics product manufacturers. The Semiconductor and IP Licensing segment develops and licenses semiconductor technologies and intellectual property to manufacturers, foundries, subcontract assemblers, and others. It develops and licenses 3D semiconductor packaging, interconnect, and bonding solutions for semiconductors that are used in smartphones, tablets, and laptops, as well as servers used in datacenters. This segment also provides engineering services. The company was formerly known as Tessera Holding Corporation and changed its name to Xperi Corporation in February 2017. Xperi Corporation was founded in 1990 and is headquartered in San Jose, California.

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