Comparing POET Technologies (NASDAQ:POET) and STMicroelectronics (NYSE:STM)

POET Technologies (NASDAQ:POET) and STMicroelectronics (NYSE:STM) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Insider & Institutional Ownership

2.0% of POET Technologies shares are owned by institutional investors. Comparatively, 5.1% of STMicroelectronics shares are owned by institutional investors. 0.5% of POET Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares POET Technologies and STMicroelectronics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
POET Technologies	$119,946.00	4,304.89	-$20.27 million	($0.59)	-11.44
STMicroelectronics	$14.23 billion	1.55	$4.21 billion	$2.43	10.05

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

Profitability

This table compares POET Technologies and STMicroelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
POET Technologies	N/A	-194.16%	-132.32%
STMicroelectronics	16.11%	13.29%	9.19%

Volatility and Risk

POET Technologies has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, STMicroelectronics has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for POET Technologies and STMicroelectronics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
POET Technologies	0	0	2	1	3.33
STMicroelectronics	1	5	6	1	2.54

POET Technologies presently has a consensus target price of $6.25, indicating a potential downside of 7.41%. STMicroelectronics has a consensus target price of $36.26, indicating a potential upside of 48.53%. Given STMicroelectronics’ higher possible upside, analysts clearly believe STMicroelectronics is more favorable than POET Technologies.

Summary

STMicroelectronics beats POET Technologies on 11 of the 14 factors compared between the two stocks.

About POET Technologies

POET Technologies Inc. designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. It offers integration solutions based on the POET Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques. It also develops photonic integrated components. The company serves the data center, telecommunications, Internet of things and industrial sensing, automotive LIDAR, optical coherence tomography for medical devices, and virtual reality systems markets. The company was formerly known as Opel Technologies Inc. and changed its name to POET Technologies Inc. in June 2013. POET Technologies Inc. was incorporated in 1972 and is headquartered in Toronto, Canada.

About STMicroelectronics

STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments. The Automotive and Discrete Group segment offers automotive integrated circuits (ICs), and discrete and power transistor products. The Analog, MEMS and Sensors Group segment provides industrial application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs); general purpose analog products; custom analog ICs; wireless charging solutions; galvanic isolated gate drivers; low and high voltage amplifiers, comparators, and current-sense amplifiers; MasterGaN, a solution that integrates a silicon driver and GaN power transistors in a single package; wireline and wireless connectivity ICs; touch screen controllers; micro-electro-mechanical systems (MEMS) products, including sensors or actuators; and optical sensing solutions. The Microcontrollers and Digital ICs Group segment offers general purpose and secure microcontrollers; and radio frequency (RF) products. It also offers application-specific standard products for analog, digital and mixed-signal applications. In addition, the company provides assembly and other services. It sells its products through distributors and retailers, as well as through sales representatives. The company serves automotive, industrial, personal electronics and communications equipment, and computers and peripherals markets. STMicroelectronics N.V. was incorporated in 1987 and is headquartered in Geneva, Switzerland.