Critical Survey: Power Integrations (NASDAQ:POWI) versus NeoMagic (OTCMKTS:NMGC)

Power Integrations (NASDAQ:POWI) and NeoMagic (OTCMKTS:NMGC) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Volatility and Risk

Power Integrations has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, NeoMagic has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Valuation and Earnings

This table compares Power Integrations and NeoMagic”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Power Integrations	$444.54 million	8.15	$55.74 million	$0.66	96.49
NeoMagic	N/A	N/A	N/A	N/A	N/A

Power Integrations has higher revenue and earnings than NeoMagic.

Profitability

This table compares Power Integrations and NeoMagic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Power Integrations	9.27%	4.14%	3.77%
NeoMagic	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent ratings for Power Integrations and NeoMagic, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Power Integrations	0	2	4	1	2.86
NeoMagic	0	0	0	0	0.00

Power Integrations presently has a consensus price target of $78.00, indicating a potential upside of 22.49%. Given Power Integrations’ stronger consensus rating and higher probable upside, research analysts plainly believe Power Integrations is more favorable than NeoMagic.

Summary

Power Integrations beats NeoMagic on 9 of the 9 factors compared between the two stocks.

About Power Integrations

Power Integrations, Inc. designs, develops, manufactures, and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion worldwide. The company provides a range of alternating current to direct current power conversion products that address power supply ranging from less than one watt of output to approximately 500 watts of output for mobile-device chargers, consumer appliances, utility meters, LCD monitors, main and standby power supplies for desktop computers and TVs, LED lighting, and various other consumer and industrial applications, as well as power conversion in high-power applications comprising industrial motors, solar and wind-power systems, electric vehicles, and high-voltage DC transmission systems. It also offers high-voltage diodes; InnoSwitch IC for electric vehicles; high-voltage gate-driver products used to operate high-voltage switches, such as insulated-gate bipolar transistors and silicon-carbide MOSFETs under the SCALE and SCALE-2 product-family names; and SCALE-iDriver for use in powertrain and charging applications for electric vehicles. In addition, the company provides motor-driver ICs for use in refrigerator compressors, ceiling fans, and air purifiers, as well as pumps, fans, and blowers used in consumer appliances, such as dishwashers and laundry machines. It serves communications, computer, consumer, and industrial markets. The company sells its products to original equipment manufacturers and merchant power supply manufacturers through direct sales staff, as well as a network of independent sales representatives and distributors. Power Integrations, Inc. was incorporated in 1988 and is headquartered in San Jose, California.

About NeoMagic

NeoMagic Corporation designs and delivers semiconductors and software solutions for video, television, imaging, graphic, and audio devices. It offers microcontrollers; horizon digital picture frame and digital mobile TV solutions; and SOC processors, such as application processors and Neomobile TV solutions. The company, through its MercadoMagico.com division, operates an e-Commerce platform that allows user to buy and sell products from one another or buy premium electronic products. It sells its applications processors under the MiMagic brand name. The company was founded in 1993 and is based in Milpitas, California.