Broadcom (NASDAQ:AVGO) versus EMCORE (NASDAQ:EMKR) Financial Analysis

EMCORE (NASDAQ:EMKR) and Broadcom (NASDAQ:AVGO) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for EMCORE and Broadcom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EMCORE	0	2	1	0	2.33
Broadcom	0	1	24	1	3.00

EMCORE presently has a consensus price target of $3.00, suggesting a potential upside of 22.45%. Broadcom has a consensus price target of $189.23, suggesting a potential upside of 7.13%. Given EMCORE’s higher possible upside, research analysts plainly believe EMCORE is more favorable than Broadcom.

Volatility & Risk

EMCORE has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Broadcom has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares EMCORE and Broadcom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EMCORE	-81.08%	-25.05%	-13.56%
Broadcom	10.88%	30.12%	11.66%

Valuation and Earnings

This table compares EMCORE and Broadcom”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EMCORE	$90.96 million	0.22	-$75.36 million	($8.70)	-0.28
Broadcom	$46.82 billion	17.56	$14.08 billion	$23.25	7.60

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

Insider and Institutional Ownership

65.7% of EMCORE shares are owned by institutional investors. Comparatively, 76.4% of Broadcom shares are owned by institutional investors. 0.9% of EMCORE shares are owned by company insiders. Comparatively, 2.0% of Broadcom shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Broadcom beats EMCORE on 13 of the 15 factors compared between the two stocks.

About EMCORE

EMCORE Corporation, together with its subsidiaries, designs and manufactures fiber optic gyro, ring laser gyro, and micro electromechanical system-based inertial sensors and systems in the United States and internationally. It offers navigation system and inertial sensing products, such as gyroscopes and multi-axis sensors, inertial measurement units, fiber optic gyroscopes, quartz micro electromechanical systems, inertial navigation systems, tactical navigation, and naval and amphibious navigation, as well as radar positioning and pointing systems, and battlefield/artillery survey systems. The company sells its products through direct sales force, application engineers, third-party sales representatives, and distributors. EMCORE Corporation was founded in 1984 and is headquartered in Alhambra, California.

About Broadcom

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices. The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.