Critical Review: GCT Semiconductor (NYSE:GCTS) vs. Himax Technologies (NASDAQ:HIMX)

GCT Semiconductor (NYSE:GCTS) and Himax Technologies (NASDAQ:HIMX) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Institutional & Insider Ownership

28.1% of GCT Semiconductor shares are owned by institutional investors. Comparatively, 69.8% of Himax Technologies shares are owned by institutional investors. 0.2% of GCT Semiconductor shares are owned by company insiders. Comparatively, 31.5% of Himax Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for GCT Semiconductor and Himax Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCT Semiconductor	0	0	1	0	3.00
Himax Technologies	0	0	1	0	3.00

GCT Semiconductor presently has a consensus price target of $8.00, indicating a potential upside of 218.09%. Himax Technologies has a consensus price target of $15.00, indicating a potential upside of 69.49%. Given GCT Semiconductor’s higher possible upside, equities research analysts plainly believe GCT Semiconductor is more favorable than Himax Technologies.

Profitability

This table compares GCT Semiconductor and Himax Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCT Semiconductor	N/A	N/A	-27.81%
Himax Technologies	8.77%	9.06%	4.78%

Earnings and Valuation

This table compares GCT Semiconductor and Himax Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCT Semiconductor	N/A	N/A	-$2.00 million	N/A	N/A
Himax Technologies	$897.26 million	1.72	$50.62 million	$0.44	20.11

Himax Technologies has higher revenue and earnings than GCT Semiconductor.

Volatility and Risk

GCT Semiconductor has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Himax Technologies has a beta of 1.94, meaning that its share price is 94% more volatile than the S&P 500.

Summary

Himax Technologies beats GCT Semiconductor on 8 of the 9 factors compared between the two stocks.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.

About Himax Technologies

Himax Technologies, Inc., a fabless semiconductor company, provides display imaging processing technologies in China, Taiwan, the Philippines, Korea, Japan, Europe, and the United States. The company operates in two segments, Driver IC and Non-Driver Products. It offers display driver integrated circuits (ICs) and timing controllers that are used in televisions, PC monitors, laptops, mobile phones, tablets, automotive, ePaper devices, industrial displays, and other products. The company also provides automotive IC solutions, including traditional driver ICs; advanced in-cell touch and display driver integration; large touch and display driver integration; and local dimming timing controllers, as well as active matrix organic light-emitting diode (AMOLED) solutions, including AMOLED drivers, timing controllers, and touch controller ICs. In addition, it offers application specific IC services; liquid crystal on silicon and micro-electro mechanical system products; Power ICs; complementary metal oxide semiconductor image sensor products; wafer level optics products; 3D sensing products; and ultralow power WiseEye smart image sensing products. The company markets its display drivers to panel manufacturers, mobile device module manufacturers, and manufacturers of end-use products. Himax Technologies, Inc. was incorporated in 2001 and is headquartered in Tainan City, Taiwan.