Head to Head Survey: ARM (NASDAQ:ARM) & United Microelectronics (NYSE:UMC)
by Michael Walen · The Markets DailyARM (NASDAQ:ARM – Get Free Report) and United Microelectronics (NYSE:UMC – Get Free Report) are both large-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.
Analyst Ratings
This is a breakdown of current ratings and price targets for ARM and United Microelectronics, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ARM | 1 | 10 | 17 | 2 | 2.67 |
| United Microelectronics | 0 | 1 | 2 | 0 | 2.67 |
ARM presently has a consensus target price of $125.96, indicating a potential downside of 10.38%. United Microelectronics has a consensus target price of $8.90, indicating a potential upside of 6.59%. Given United Microelectronics’ higher possible upside, analysts clearly believe United Microelectronics is more favorable than ARM.
Profitability
This table compares ARM and United Microelectronics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ARM | 12.12% | 18.97% | 13.23% |
| United Microelectronics | 23.90% | 14.80% | 9.41% |
Insider & Institutional Ownership
7.5% of ARM shares are owned by institutional investors. Comparatively, 5.1% of United Microelectronics shares are owned by institutional investors. 8.0% of United Microelectronics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares ARM and United Microelectronics”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ARM | $3.50 billion | 42.11 | $306.00 million | N/A | N/A |
| United Microelectronics | $7.25 billion | 2.89 | $1.95 billion | $0.70 | 11.93 |
United Microelectronics has higher revenue and earnings than ARM.
Summary
ARM beats United Microelectronics on 7 of the 12 factors compared between the two stocks.
About ARM
Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.
About United Microelectronics
United Microelectronics Corporation operates as a semiconductor wafer foundry in Taiwan, Singapore, China, Hong Kong, Japan, the United States, Europe, and internationally. The company provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. It serves fabless design companies and integrated device manufacturers. The company was incorporated in 1980 and is headquartered in Hsinchu City, Taiwan.