Financial Analysis: Valens Semiconductor (NYSE:VLN) versus United Microelectronics (NYSE:UMC)

United Microelectronics (NYSE:UMC) and Valens Semiconductor (NYSE:VLN) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and recommmendations for United Microelectronics and Valens Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Microelectronics	0	3	0	1	2.50
Valens Semiconductor	0	0	2	1	3.33

United Microelectronics presently has a consensus target price of $7.40, suggesting a potential upside of 7.79%. Valens Semiconductor has a consensus target price of $4.00, suggesting a potential upside of 87.44%. Given Valens Semiconductor’s stronger consensus rating and higher possible upside, analysts clearly believe Valens Semiconductor is more favorable than United Microelectronics.

Insider & Institutional Ownership

5.1% of United Microelectronics shares are held by institutional investors. Comparatively, 33.9% of Valens Semiconductor shares are held by institutional investors. 8.0% of United Microelectronics shares are held by insiders. Comparatively, 58.9% of Valens Semiconductor shares are held 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.

Valuation & Earnings

This table compares United Microelectronics and Valens Semiconductor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Microelectronics	$232.30 billion	0.07	$1.44 billion	$0.58	11.84
Valens Semiconductor	$57.86 million	3.92	-$19.66 million	($0.35)	-6.10

United Microelectronics has higher revenue and earnings than Valens Semiconductor. Valens Semiconductor is trading at a lower price-to-earnings ratio than United Microelectronics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares United Microelectronics and Valens Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Microelectronics	20.35%	12.78%	8.16%
Valens Semiconductor	-41.94%	-14.05%	-12.51%

Volatility and Risk

United Microelectronics has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Valens Semiconductor has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Summary

United Microelectronics beats Valens Semiconductor on 8 of the 14 factors compared between the two stocks.

About United Microelectronics

United Microelectronics Corporation operates as a semiconductor wafer foundry in Taiwan, China, Hong Kong, Japan, Korea, the United States, Europe, and internationally. The company provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. It serves fabless design companies and integrated device manufacturers. United Microelectronics Corporation was incorporated in 1980 and is headquartered in Hsinchu City, Taiwan.

About Valens Semiconductor

Valens Semiconductor Ltd. engages in the provision of semiconductor products for the audio-video and automotive industries. The company offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. It also provides audio-video solutions for the enterprise, education, industrial, digital signage, industrial, and medical markets. In addition, it offers automotive chipsets that support advanced driver-assistance systems, automotive data solutions, infotainment, telematics, and backbone connectivity. The company’s product series include VS100, VS2000, VS3000, VS6000, VS7000, Valens USB and power extender, Valens VS6320, USB 3.2 Gen1 extension chipset, VA6000, and VA7000. It has a collaboration with iCatch Technology to develop a 360-degree multi-camera videoconferencing solution. The company operates in Israel, China, Hong Kong, the United States, Japan, Germany, Hungary, and internationally. Valens Semiconductor Ltd. is headquartered in Hod Hasharon, Israel.