Monolithic Power Systems (MPWR) and Its Competitors Critical Review

Monolithic Power Systems (NASDAQ:MPWR) is one of 221 publicly-traded companies in the “Semiconductors & Semiconductor Equipment” industry, but how does it weigh in compared to its peers? We will compare Monolithic Power Systems to similar companies based on the strength of its valuation, risk, analyst recommendations, profitability, dividends, earnings and institutional ownership.

Earnings and Valuation

This table compares Monolithic Power Systems and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Monolithic Power Systems	$3.74 billion	$621.48 million	69.63
Monolithic Power Systems Competitors	$39.42 billion	$2.48 billion	12.48

Monolithic Power Systems’ peers have higher revenue and earnings than Monolithic Power Systems. Monolithic Power Systems is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Monolithic Power Systems has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500. Comparatively, Monolithic Power Systems’ peers have a beta of 2.80, suggesting that their average share price is 180% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Monolithic Power Systems and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monolithic Power Systems	0	1	14	1	3.00
Monolithic Power Systems Competitors	3492	12318	25727	993	2.57

Monolithic Power Systems presently has a consensus target price of $1,783.77, suggesting a potential upside of 41.45%. As a group, “Semiconductors & Semiconductor Equipment” companies have a potential upside of 44.48%. Given Monolithic Power Systems’ peers higher possible upside, analysts plainly believe Monolithic Power Systems has less favorable growth aspects than its peers.

Insider and Institutional Ownership

93.5% of Monolithic Power Systems shares are owned by institutional investors. Comparatively, 54.6% of shares of all “Semiconductors & Semiconductor Equipment” companies are owned by institutional investors. 3.6% of Monolithic Power Systems shares are owned by company insiders. Comparatively, 11.9% of shares of all “Semiconductors & Semiconductor Equipment” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Monolithic Power Systems and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Monolithic Power Systems	23.85%	25.23%	20.80%
Monolithic Power Systems Competitors	-1,279.15%	-126.37%	-3.99%

Dividends

Monolithic Power Systems pays an annual dividend of $8.00 per share and has a dividend yield of 0.6%. Monolithic Power Systems pays out 44.2% of its earnings in the form of a dividend. As a group, “Semiconductors & Semiconductor Equipment” companies pay a dividend yield of 0.9% and pay out 29.1% of their earnings in the form of a dividend. Monolithic Power Systems has increased its dividend for 8 consecutive years. Monolithic Power Systems lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Monolithic Power Systems beats its peers on 8 of the 15 factors compared.

Monolithic Power Systems Company Profile

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.