Silicon Laboratories (NASDAQ:SLAB – Get Rating) and Tower Semiconductor (NASDAQ:TSEM – Get Rating) 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 dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.
Profitability
This table compares Silicon Laboratories and Tower Semiconductor’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Silicon Laboratories | 8.93% | 7.44% | 5.00% |
| Tower Semiconductor | 15.77% | 14.79% | 10.85% |
Institutional & Insider Ownership
99.6% of Silicon Laboratories shares are held by institutional investors. Comparatively, 53.8% of Tower Semiconductor shares are held by institutional investors. 2.0% of Silicon Laboratories shares are held by insiders. Comparatively, 1.0% of Tower Semiconductor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Silicon Laboratories | 1 | 3 | 5 | 0 | 2.44 |
| Tower Semiconductor | 0 | 0 | 0 | 0 | N/A |
Silicon Laboratories presently has a consensus price target of $179.78, indicating a potential upside of 7.07%. Given Silicon Laboratories’ higher possible upside, analysts clearly believe Silicon Laboratories is more favorable than Tower Semiconductor.
Volatility & Risk
Silicon Laboratories has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Tower Semiconductor has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.
Earnings & Valuation
This table compares Silicon Laboratories and Tower Semiconductor’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Silicon Laboratories | $1.02 billion | 5.25 | $91.40 million | $2.54 | 66.11 |
| Tower Semiconductor | $1.68 billion | 2.74 | $264.57 million | $2.39 | 17.57 |
Tower Semiconductor has higher revenue and earnings than Silicon Laboratories. Tower Semiconductor is trading at a lower price-to-earnings ratio than Silicon Laboratories, indicating that it is currently the more affordable of the two stocks.
Summary
Silicon Laboratories beats Tower Semiconductor on 8 of the 13 factors compared between the two stocks.
About Silicon Laboratories
Silicon Laboratories, Inc. engages in providing and developing analog-intensive and mixed-signal integrated circuits. It operates through the United States, China, and Rest of World geographical segments. The company was founded by Navdeep S. Sooch, David R. Welland, and Jeffrey W. Scott in August 1996 and is headquartered in Austin, TX.
About Tower Semiconductor
Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, other Asia countries, and Europe. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The company also offers wafer fabrication services and design enablement platform for design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.
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