Marvell Technology vs. STMicroelectronics: Which Semiconductor Stock is a Better Buy?

NYSE: STM | STMicroelectronics N.V. News, Ratings, and Charts

STM – Semiconductors made a new all-time high last week before dropping this week. Given the sector’s fundamentals. investors should consider high-quality stocks in the sector. Which is the better buy: Marvell Technology (MRVL) and STMicroelectronics (STM)?.

The semiconductor index made a new, all-time high last week before dropping with the overall market. However, the sector’s fundamentals remain positive, and earnings season could be the next catalyst for a breakout.
 
Semiconductor sales have continued to trend higher, and they are found in all types of products. Due to strong consumer spending, shortages for certain chips have emerged, leading to greater pricing power and profits.
 
In the meantime, let’s shift our attention to two semiconductor stocks with the potential to capture even more market share soon and also across posterity. Those two stocks are Marvell Technology (MRVL) and STMicroelectronics (STM).
 
MRVL

MRVL is a maker and marketer of signal processing integrated circuits. The company has operations in the United States, China, Bermuda, the United Kingdom, Germany, and several Asian nations. Before it acquired Cavium in the summer of ’18, MRVL was primarily focused on making chips for hard disk drives in computers. The addition of Cavium expanded MRVL’s boundaries all the more, empowering MRVL to produce software-compatible processors that allow for functionality within data center applications and beyond.

MRVL has a beta of 1.10 so it probably won’t slide or jump much should the market get wild. The stock has a forward P/E ratio of 40.33. This ratio indicates the stock might be slightly overpriced at $56.61 per share. MRVL has a 52-week high of $58.95 and a 52-week low of $32.53.

Take a look at MRVL’s POWR Ratings and you will be dismayed. The stock has a D POWR Rating. This indicates MRVL is a Sell. The stock has Ds in the Value and Quality components of the POWR Ratings along with Cs in the Stability and Sentiment components. You can find out how MRVL fares in the rest of the POWR Ratings components such as Momentum and Growth by clicking here.

Of the nearly 100 publicly traded companies in the Semiconductor & Wireless Chip space, MRVL is ranked 86th. You can find out more about this industry by clicking here.

The analysts have established an average target price of $59.92 for MRVL. If the stock hits this level, it will have climbed by nearly 10%. The highest analyst target price for MRVL is $74. The lowest analyst target price for the stock is $49. The stock’s average analyst price target has increased more than $12.54 across the previous 35 weeks.

STM

STM is a worldwide semiconductor business that makes semiconductor integrated circuits along with additional devices used for consumer products, computer systems, telecom systems, control systems, auto products, and plenty more.

STM has a forward P/E ratio of 21.07. This is a reasonable ratio, indicating the stock might be slightly overpriced. However, there are plenty of semiconductor and tech stocks that have even higher forward P/E ratios. STM has a beta of 1.49 so it is likely to hold steady should the market become rocky. STM is currently trading at $38.14. The stock’s 52-week high is $43.02. STM has a 52-week low of $26.90.

STM is a POWR Ratings darling with an A overall grade. This grade indicates STM is a Strong Buy. STM has Bs in the Growth, Value, Sentiment, and Quality components of the POWR Ratings. Click here to learn more about how STM fares in the remainder of the POWR Ratings components such as Momentum and Stability.

STM is ranked third of 99 stocks in the Semiconductor & Wireless Chip industry. You can learn more about the stocks in this sector by clicking here.

The analysts have established an average target price of $40.22 for STM. If the stock hits this level, it will have increased by more than 5% in value. The highest analyst target price for STM is $47.60. The lowest analyst target price for the stock is $29.50. Across the past 143 days, STM’s average analyst price target has increased slightly more than $11.

Which is the Better Buy?

STM is the better buy. You simply cannot go wrong investing in a stock with an A POWR Rating grade. Establish a position in STM and it should perform quite well in the short term and also in the years ahead.


STM shares were trading at $38.18 per share on Wednesday afternoon, up $1.24 (+3.36%). Year-to-date, STM has gained 3.10%, versus a 16.81% rise in the benchmark S&P 500 index during the same period.


About the Author: Patrick Ryan


Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
STMGet RatingGet RatingGet Rating
MRVLGet RatingGet RatingGet Rating

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