Head to Head Survey: NVE (NASDAQ:NVEC) vs. ARM (NASDAQ:ARM)
by Danessa Lincoln · The Markets DailyNVE (NASDAQ:NVEC – Get Free Report) and ARM (NASDAQ:ARM – Get Free Report) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.
Analyst Ratings
This is a breakdown of recent ratings and target prices for NVE and ARM, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NVE | 0 | 1 | 0 | 0 | 2.00 |
| ARM | 1 | 8 | 16 | 0 | 2.60 |
ARM has a consensus target price of $160.81, suggesting a potential upside of 28.36%. Given ARM’s stronger consensus rating and higher probable upside, analysts clearly believe ARM is more favorable than NVE.
Profitability
This table compares NVE and ARM’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NVE | 54.59% | 23.47% | 22.73% |
| ARM | 17.15% | 14.01% | 10.65% |
Valuation and Earnings
This table compares NVE and ARM”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NVE | $25.88 million | 12.36 | $15.06 million | $2.92 | 22.63 |
| ARM | $4.01 billion | 33.03 | $792.00 million | $0.75 | 167.04 |
ARM has higher revenue and earnings than NVE. NVE is trading at a lower price-to-earnings ratio than ARM, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
66.0% of NVE shares are held by institutional investors. Comparatively, 7.5% of ARM shares are held by institutional investors. 1.9% of NVE shares are held by company insiders. 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.
Risk and Volatility
NVE has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500. Comparatively, ARM has a beta of 4.35, meaning that its stock price is 335% more volatile than the S&P 500.
Summary
ARM beats NVE on 8 of the 14 factors compared between the two stocks.
About NVE
NVE Corporation develops and sells devices that use spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information in the United States and internationally. The company manufactures spintronic products, including sensors and couplers for use in acquiring and transmitting data. Its products comprise standard sensors to detect the presence of a magnetic or metallic material to determine position, rotation, or speed for the factory automation market; and custom and medical sensors for medical devices to replace electromechanical magnetic switches. The company also offers spintronic couplers for power conversion and industrial Internet of Things (IIoT) market; and DC-to-DC convertors for use in power conversion systems and industrial networks for the IIoT. In addition, it undertakes contracts for research and development, and licensing of spintronic magnetoresistive random access memory technology. NVE Corporation was founded in 1989 and is headquartered in Eden Prairie, Minnesota.
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.