Financial Analysis: Renesas Electronics (OTCMKTS:RNECF) versus GlobalFoundries (NASDAQ:GFS)

GlobalFoundries (NASDAQ:GFS) and Renesas Electronics (OTCMKTS:RNECF) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a summary of recent ratings for GlobalFoundries and Renesas Electronics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GlobalFoundries	0	7	7	0	2.50
Renesas Electronics	0	0	0	0	N/A

GlobalFoundries presently has a consensus target price of $57.54, suggesting a potential upside of 46.22%. Given GlobalFoundries’ higher probable upside, analysts plainly believe GlobalFoundries is more favorable than Renesas Electronics.

Earnings and Valuation

This table compares GlobalFoundries and Renesas Electronics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GlobalFoundries	$6.89 billion	3.15	$1.02 billion	$1.62	24.29
Renesas Electronics	N/A	N/A	N/A	$25.60	0.58

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

Insider and Institutional Ownership

0.2% of Renesas Electronics shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares GlobalFoundries and Renesas Electronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GlobalFoundries	11.82%	7.75%	4.78%
Renesas Electronics	N/A	N/A	N/A

Summary

GlobalFoundries beats Renesas Electronics on 7 of the 9 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 Renesas Electronics

Renesas Electronics Corporation researches, develops, designs, manufactures, sells, and services semiconductors in Japan, China, rest of Asia, Europe, North America, and internationally. The company operates through Automotive Business and Industrial/Infrastructure/IoT Business segments. It offers microcontrollers (MCUs) and microprocessors; amplifiers, audio and video, data converters, power line communication, and switches and multiplexer products; and specific clocks, clock distribution and generation, jitter attenuators with frequency translation, and crystal oscillator, and VersaClock programmable clocks. The company also provides buffers, haptic drivers, data compression, industrial Ethernet, IO-link line driver, memory interface, optical interconnect, photocouplers/optocouplers, power line communication, signal integrity, telecom datacom and interface, USB switches and hubs, and wireless connectivity products. In addition, it offers bus switches, first-in, first-out, memory interface, multi-port and SRAMs, non-volatile memory, and standard logic products; and AC/DC & isolated DC/DC converters, battery management, DC converters, digital power, discrete power devices, linear regulators, FET and motor drivers, multi-channel power management ICs, LED backlight drivers, solid state lighting, USB type-C, USB power delivery, and rapid charge, voltage references, and wireless power. Further, the company provides Automotive Radar Sensors, Industrial Radar Sensors, modulators and demodulators, phased array beamformers, transistor arrays, and variable gain amplifiers, as well as RF amplifiers, attenuators, mixers, switches, and synthesizers; and environmental, flow, industrial radar, optical, position, and automotive sensor products, as well as senor signal conditioners products. Additionally, it offers space and harsh environment products and wireless connectivity products. Renesas Electronics Corporation was incorporated in 2002 and is headquartered in Tokyo, Japan.