Head to Head Comparison: GlobalFoundries (NASDAQ:GFS) versus Texas Instruments (NASDAQ:TXN)

GlobalFoundries (NASDAQ:GFS) and Texas Instruments (NASDAQ:TXN) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Insider & Institutional Ownership

85.0% of Texas Instruments shares are owned by institutional investors. 0.7% of Texas Instruments shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares GlobalFoundries and Texas Instruments”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GlobalFoundries	$6.75 billion	3.13	-$265.00 million	($0.48)	-79.90
Texas Instruments	$15.64 billion	11.13	$4.80 billion	$5.19	36.86

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

Analyst Ratings

This is a summary of recent recommendations for GlobalFoundries and Texas Instruments, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GlobalFoundries	0	7	7	0	2.50
Texas Instruments	2	12	8	0	2.27

GlobalFoundries currently has a consensus target price of $49.64, suggesting a potential upside of 29.45%. Texas Instruments has a consensus target price of $209.20, suggesting a potential upside of 9.36%. Given GlobalFoundries’ stronger consensus rating and higher probable upside, equities research analysts clearly believe GlobalFoundries is more favorable than Texas Instruments.

Profitability

This table compares GlobalFoundries and Texas Instruments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GlobalFoundries	-3.93%	6.05%	3.82%
Texas Instruments	30.68%	28.08%	13.64%

Volatility and Risk

GlobalFoundries has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Texas Instruments has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Summary

Texas Instruments beats GlobalFoundries on 11 of the 14 factors compared between the two stocks.

About GlobalFoundries

GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.

About Texas Instruments

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States and internationally. The company operates through Analog and Embedded Processing segments. The Analog segment offers power products to manage power requirements across various voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage references, and lighting products. This segment provides signal chain products that sense, condition, and measure signals to allow information to be transferred or converted for further processing and control, including amplifiers, data converters, interface products, motor drives, clocks, and logic and sensing products. The Embedded Processing segment offers microcontrollers that are used in electronic equipment; digital signal processors for mathematical computations; and applications processors for specific computing activity. This segment offers products for use in various markets, such as industrial, automotive, personal electronics, communications equipment, enterprise systems, and calculators and other. It provides DLP products primarily for use in project high-definition images; calculators; and application-specific integrated circuits. The company markets and sells its semiconductor products through direct sales and distributors, as well as through its website. Texas Instruments Incorporated was founded in 1930 and is headquartered in Dallas, Texas.