EZchip Semiconductor (NASDAQ: EZCH) and Broadcom (NASDAQ:BRCM) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Valuation and Earnings

This table compares EZchip Semiconductor and Broadcom’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EZchip Semiconductor N/A N/A N/A ($0.17) -149.94
Broadcom N/A N/A N/A $2.30 23.77

EZchip Semiconductor is trading at a lower price-to-earnings ratio than Broadcom, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for EZchip Semiconductor and Broadcom, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EZchip Semiconductor 0 0 0 0 N/A
Broadcom 0 0 1 0 3.00

Broadcom has a consensus price target of $216.40, suggesting a potential upside of 295.83%. Given Broadcom’s higher possible upside, analysts plainly believe Broadcom is more favorable than EZchip Semiconductor.

Profitability

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

Net Margins Return on Equity Return on Assets
EZchip Semiconductor 17.05% 6.03% 5.64%
Broadcom 19.62% 17.57% 13.12%

Dividends

Broadcom pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. EZchip Semiconductor does not pay a dividend. Broadcom pays out 24.3% of its earnings in the form of a dividend.

Summary

Broadcom beats EZchip Semiconductor on 8 of the 9 factors compared between the two stocks.

EZchip Semiconductor Company Profile

EZchip Semiconductor Ltd.is a fabless semiconductor company that provides data-path processing solutions for a range of applications for carrier, cloud and data center networks. The Company’s portfolio of solutions includes network processors, multi-core processors, network adapters and appliances with a software ecosystem. It designs and sells network processors for networking equipment, integrating several key functions into a single chip. Networking equipment vendors use the Company’s network processors to form the silicon core of networking equipment, such as switches and routers, for voice, video and data integration in a variety of applications. The Company’s network processors are single-chip solutions that enable its customers to design multi-port line cards. Its multi-core processors allow customers to design systems that are high performance, as well as power efficient. The Company’s subsidiaries include EZchip Technologies Ltd., EZchip Inc. and EZchip Semiconductor Inc.

Broadcom Company Profile

Broadcom Corporation (Broadcom) provides semiconductor solutions for wired and wireless communications. The Company offers a portfolio of system-on-a-chip solutions (SoCs) that deliver voice, video, data and multimedia connectivity in the home, office and mobile environments. The Company’s solutions are used globally by manufacturers and are embedded in an array of communications products. The Company operates in two segments: Broadband and Connectivity, and Infrastructure and Networking. Broadcom’s solutions in Broadband and Connectivity segment include set-top box solutions, broadband modem solutions, connectivity solutions and a range of other technologies. Its solutions in Infrastructure and Networking segment include Ethernet switches and PHYs, which includes switches and fabrics; copper and optical transceivers; backplane and optical front-end physical layer devices; processors, and other Infrastructure and Networking technologies.

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