Xilinx (XLNX) & Smart Global (SGH) Critical Survey

Smart Global (NASDAQ: SGH) and Xilinx (NASDAQ:XLNX) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Risk and Volatility

Smart Global has a beta of -0.68, indicating that its share price is 168% less volatile than the S&P 500. Comparatively, Xilinx has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.



Dividends

Xilinx pays an annual dividend of $1.44 per share and has a dividend yield of 2.0%. Smart Global does not pay a dividend. Xilinx pays out 50.9% of its earnings in the form of a dividend. Xilinx has raised its dividend for 7 consecutive years.

Institutional & Insider Ownership

86.0% of Smart Global shares are owned by institutional investors. Comparatively, 89.5% of Xilinx shares are owned by institutional investors. 6.9% of Smart Global shares are owned by insiders. Comparatively, 0.2% of Xilinx shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Smart Global and Xilinx’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Smart Global 6.99% 94.82% 21.43%
Xilinx 20.52% 31.63% 14.83%

Analyst Recommendations

This is a summary of recent ratings and target prices for Smart Global and Xilinx, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Smart Global 0 1 6 0 2.86
Xilinx 1 8 9 0 2.44

Smart Global currently has a consensus price target of $52.07, indicating a potential upside of 65.15%. Xilinx has a consensus price target of $76.41, indicating a potential upside of 7.38%. Given Smart Global’s stronger consensus rating and higher possible upside, research analysts clearly believe Smart Global is more favorable than Xilinx.

Earnings and Valuation

This table compares Smart Global and Xilinx’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Smart Global $132.88 million 5.29 -$7.79 million $2.04 15.46
Xilinx $2.54 billion 7.09 $512.38 million $2.83 25.14

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

Summary

Xilinx beats Smart Global on 11 of the 17 factors compared between the two stocks.

About Smart Global

SMART Global Holdings, Inc. designs, manufactures, and supplies specialty memory solutions worldwide. The company offers dynamic random access memory (DRAM) components, which are used to manufacture modules and other products; DRAM modules for desktop, notebook, and server applications, as well as for use in smartphones; and specialty DRAM modules for industrial, communications, and networking applications, as well as develops specialized memory module designs based on original equipment manufacturer (OEM) requirements. It also provides flash memory, USB, and serial advanced technology attachment products primarily for use in communications equipment, printers, servers and storage products, switches, and routers; and aerospace, automotive, and defense industries, as well as industrial applications. In addition, the company offers supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging. SMART Global Holdings, Inc. sells its products to OEMs through direct sales force and independent sales representatives in North America, Latin America, Asia, and Europe. The company was formerly known as Saleen Holdings, Inc. and changed its name to SMART Global Holdings, Inc. in August 2014. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Newark, California.

About Xilinx

Xilinx, Inc. designs and develops programmable devices and associated technologies worldwide. Its programmable devices comprise integrated circuits (ICs) in the form of programmable logic devices (PLDs), such as programmable system on chips, and three dimensional ICs; adaptive compute acceleration platform; software design tools to program the PLDs; software development environments and embedded platforms; targeted reference designs; printed circuit boards; and intellectual property (IP) core licenses covering Ethernet, memory controllers, Interlaken, and peripheral component interconnect express interfaces, as well as domain-specific IP in the areas of embedded, digital signal processing and connectivity, and market-specific IP cores. The company also offers development boards; development kits, including hardware, design tools, IP, and reference designs that are designed to streamline and accelerate the development of domain-specific and market-specific applications; and configuration products, such as one-time programmable and in-system programmable storage devices to configure field programmable gate arrays. In addition, it provides design, customer training, field engineering, and technical support services. The company offers its products to electronic equipment manufacturers in sub-segments, such as wireline and data center, wireless, aerospace and defense, test and measurement, industrial, scientific and medical, automotive, audio, video and broadcast, and consumer. Xilinx, Inc. sells its products through a network of independent distributors; and through direct sales to original equipment manufacturers and electronic manufacturing service providers, as well as independent sales representatives. The company was founded in 1984 and is headquartered in San Jose, California.

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