Financial Survey: ARM (NASDAQ:ARM) and Renesas Electronics (OTCMKTS:RNECY)

Renesas Electronics (OTCMKTS:RNECY) and ARM (NASDAQ:ARM) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Insider and Institutional Ownership

7.5% of ARM shares are owned by institutional investors. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Renesas Electronics	N/A	N/A	N/A
ARM	20.25%	12.24%	9.41%

Earnings and Valuation

This table compares Renesas Electronics and ARM”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Renesas Electronics	N/A	N/A	N/A	N/A	N/A
ARM	$4.92 billion	52.03	$904.00 million	$0.97	247.10

ARM has higher revenue and earnings than Renesas Electronics.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Renesas Electronics and ARM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Renesas Electronics	0	0	0	0	0.00
ARM	1	7	18	0	2.65

ARM has a consensus target price of $285.33, suggesting a potential upside of 19.04%. Given ARM’s stronger consensus rating and higher possible upside, analysts plainly believe ARM is more favorable than Renesas Electronics.

Summary

ARM beats Renesas Electronics on 8 of the 8 factors compared between the two stocks.

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.

About ARM

Arm Holdings Plc engages in the licensing, marketing, research, and development of microprocessors, systems IP, graphics processing units, physical IP and associated systems IP, software, and tools. It operates through the following geographical segments: United Kingdom, United States, and Other Countries. The company was founded on November 12, 1990 and is headquartered in Cambridge, the United Kingdom.