Financial Review: Micron Technology (NASDAQ:MU) vs. GlobalFoundries (NASDAQ:GFS)

GlobalFoundries (NASDAQ:GFS) and Micron Technology (NASDAQ:MU) are both large-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Insider and Institutional Ownership

80.8% of Micron Technology shares are owned by institutional investors. 0.2% of Micron Technology shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for GlobalFoundries and Micron Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GlobalFoundries	2	10	8	0	2.30
Micron Technology	0	4	41	1	2.93

GlobalFoundries currently has a consensus price target of $75.79, indicating a potential upside of 61.22%. Micron Technology has a consensus price target of $1,407.88, indicating a potential upside of 57.12%. Given GlobalFoundries’ higher possible upside, equities research analysts plainly believe GlobalFoundries is more favorable than Micron Technology.

Profitability

This table compares GlobalFoundries and Micron Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GlobalFoundries	10.36%	6.69%	4.69%
Micron Technology	63.80%	92.62%	66.29%

Earnings & Valuation

This table compares GlobalFoundries and Micron Technology”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GlobalFoundries	$6.79 billion	3.80	$885.00 million	$1.28	36.73
Micron Technology	$133.19 billion	7.61	$84.97 billion	$74.21	12.07

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

Dividends

GlobalFoundries pays an annual dividend of $0.48 per share and has a dividend yield of 1.0%. Micron Technology pays an annual dividend of $0.60 per share and has a dividend yield of 0.1%. GlobalFoundries pays out 37.5% of its earnings in the form of a dividend. Micron Technology pays out 0.8% 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.

Risk and Volatility

GlobalFoundries has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500. Comparatively, Micron Technology has a beta of 2.22, suggesting that its share price is 122% more volatile than the S&P 500.

Summary

Micron Technology beats GlobalFoundries on 14 of the 17 factors compared between the two stocks.

About GlobalFoundries

GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.

About Micron Technology

Micron Technology, Inc. designs, develops, manufactures, and sells memory and storage products worldwide. The company operates through four segments: Compute and Networking Business Unit, Mobile Business Unit, Embedded Business Unit, and Storage Business Unit. It provides memory and storage technologies comprising dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval; non-volatile and re-writeable semiconductor storage devices; and non-volatile re-writable semiconductor memory devices that provide fast read speeds under the Micron and Crucial brands, as well as through private labels. The company offers memory products for the cloud server, enterprise, client, graphics, networking, industrial, and automotive markets, as well as for smartphone and other mobile-device markets; SSDs and component-level solutions for the enterprise and cloud, client, and consumer storage markets; discrete storage products in component and wafers; and memory and storage products for the automotive, industrial, and consumer markets. It markets its products through its direct sales force, independent sales representatives, distributors, and retailers; and web-based customer direct sales channel, as well as through channel and distribution partners. Micron Technology, Inc. was founded in 1978 and is headquartered in Boise, Idaho.