Financial Survey: Power Integrations (NASDAQ:POWI) versus Diodes (NASDAQ:DIOD)

Diodes (NASDAQ:DIOD) and Power Integrations (NASDAQ:POWI) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Insider and Institutional Ownership

99.2% of Diodes shares are held by institutional investors. 2.3% of Diodes shares are held by insiders. Comparatively, 1.7% of Power Integrations shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Diodes	7.12%	5.76%	4.43%
Power Integrations	10.38%	4.86%	4.43%

Valuation & Earnings

This table compares Diodes and Power Integrations’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diodes	$1.35 billion	2.09	$227.18 million	$3.67	16.69
Power Integrations	$412.90 million	8.00	$55.74 million	$0.92	63.24

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Diodes and Power Integrations, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diodes	0	3	2	0	2.40
Power Integrations	0	2	4	1	2.86

Diodes currently has a consensus target price of $73.20, suggesting a potential upside of 19.53%. Power Integrations has a consensus target price of $78.50, suggesting a potential upside of 34.93%. Given Power Integrations’ stronger consensus rating and higher possible upside, analysts clearly believe Power Integrations is more favorable than Diodes.

Volatility & Risk

Diodes has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Power Integrations has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

About Diodes

Diodes Incorporated, together with its subsidiaries, manufactures and supplies application-specific standard products in the broad discrete, logic, analog, and mixed-signal semiconductor markets worldwide. The company offers discrete semiconductor products, such as MOSFETs, SiC MOSFETs; data line protection, power line protection, thyristers, USB Type-C protection, and transient voltage suppressors; Schottky, small signal switching, Zener, and SiC diodes; bridges, super barrier, Schottky, Schottky bridge, and fast/ultra-fast rectifiers; and bipolar, avalanche, gate driver, and pre-bias transistors. It also provides analog products, including power management devices comprising AC-DC and DC-DC converters, USB power switches, low dropout, photocoupler and linear voltage regulators; standard linear devices consisting of operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, such as hall-effect sensors and motor drivers. In addition, the company offers mixed-signal products, such as high speed mux/demux, digital switches, interface, redrivers, universal level shifters/voltage translators, clock ICs and packet switches; standard logic products comprising low-voltage complementary metal-oxide-semiconductor (CMOS) and advanced high-speed CMOS devices; ultra-low power CMOS logic; and analog switches; multichip products and co-packaged discrete, analog and mixed-signal silicon in miniature packages; and silicon and silicon epitaxial wafers used in manufacturing frequency control products and contact images sensors. It serves the industrial, automotive, computing, communications, and consumer markets through direct sales, marketing personnel, independent sales representatives, and distributors. The company was incorporated in 1959 and is headquartered in Plano, Texas.

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.