Critical Analysis: Cree (NASDAQ:CREE) versus Kyocera (NASDAQ:KYOCY)

Cree (NASDAQ:CREE) and Kyocera (OTCMKTS:KYOCY) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Cree and Kyocera, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cree 1 7 4 0 2.25
Kyocera 0 0 0 0 N/A

Cree presently has a consensus target price of $58.67, indicating a potential upside of 0.35%. Given Cree’s higher probable upside, equities analysts clearly believe Cree is more favorable than Kyocera.

Volatility & Risk

Cree has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500. Comparatively, Kyocera has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

0.2% of Kyocera shares are owned by institutional investors. 0.6% of Cree 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 Cree and Kyocera’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cree $1.49 billion 4.12 -$279.96 million ($0.15) -389.80
Kyocera $14.71 billion 1.63 $928.89 million $2.58 25.75

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

Profitability

This table compares Cree and Kyocera’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cree -18.25% 1.59% 1.18%
Kyocera 6.10% 3.94% 3.08%

Dividends

Kyocera pays an annual dividend of $1.25 per share and has a dividend yield of 1.9%. Cree does not pay a dividend. Kyocera pays out 48.4% of its earnings in the form of a dividend.

Summary

Kyocera beats Cree on 10 of the 15 factors compared between the two stocks.

About Cree

Cree, Inc. provides lighting-class light emitting diode (LED), lighting, and semiconductor products for power and radio-frequency (RF) applications in the United States, China, Europe, South Korea, Japan, Malaysia, Taiwan, and internationally. It operates in three segments: Wolfspeed, LED Products, and Lighting Products. The Wolfspeed segment offers silicon carbide (SiC) materials for RF, power switching, gemstones, and other applications. It also provides SiC power device products, including SiC Schottky diodes, metal oxide semiconductor field effect transistors (MOSFETs), power modules, and gate driver boards for electric vehicles, including charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications. In addition, this segment offers gallium nitride (GaN) die, high-electron mobility transistors (HEMTs), monolithic microwave integrated circuits (MMICs), and laterally diffused MOSFET (LDMOS) power transistors for telecommunications infrastructure, military, and other commercial applications; and custom die manufacturing services for GaN HEMTs and MMICs. The LED Products segment provides blue and green LED chip products for video screens, gaming displays, function indicator lights and automotive backlights, headlamps, and directional indicators. It also offers XLamp LED components and LED modules for lighting applications; and surface mount and through-hole packaged LED products for video, signage, general illumination, transportation, gaming, and specialty lighting applications. The Lighting Products segment offers LED lighting systems and lamps for to distributors, retailers, and customers for offices, retail spaces, restaurants, hospitality, schools, universities, manufacturing, healthcare, airports, municipal, residential, street lighting, parking structures, and other applications. The company was founded in 1987 and is headquartered in Durham, North Carolina.

About Kyocera

Kyocera Corporation develops, produces, and distributes ceramic and electronic components, and telecommunications and information equipment worldwide. Its Industrial & Automotive Components Group segment offers fine ceramic components, automotive components, liquid crystal displays, and industrial tools to industrial machinery, automotive, general industrial, and construction markets. The company's Semiconductor Components Group segment provides inorganic and organic ceramic packages, and multilayer printing wiring boards for electronic components and devices, such as crystal components, SAW devices, and CMOS/CCD sensors for communication infrastructures and automotive-related markets. Its Electronic Devices Group segment offers electronic components and devices comprising capacitors, crystal devices, connectors, power semiconductor devices, etc., as well as printing devices for information and communications equipment, industrial equipment, and automotive markets. The company's Communications Group segment provides smartphones, mobile phones, and communication modules for the Internet of Things market; and information systems, telecommunication, and engineering services. Its Document Solutions Group segment offers printers, multifunctional products, document solutions, and supplies. The company's Life & Environment Group segment provides solar modules for commercial and residential uses; solar energy products, including storage batteries and energy management systems; medical devices, such as prosthetic joints and dental prosthetics; jewelry; and kitchen accessories, including ceramic knives. It offers its products through sales personnel, sales companies, and third-party distributors. The company was formerly known as Kyoto Ceramic Kabushiki Kaisha and changed its name to Kyocera Corporation in 1982. Kyocera Corporation was founded in 1959 and is headquartered in Kyoto, Japan.

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