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Microchip Technology Inc MCHP

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Stock XNAS Rating as of
$84.21 −0.86 (1.01%)
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As of Delayed Price Post-Trading: $84.21 0.00
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Company Report

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Microchip Technology Continues to Expand into Total System Solutions

Brian Colello

Microchip Technology is a leading supplier of microcontrollers, or MCUs, which are semiconductors that act as the brains in a wide variety of common electronic devices, from garage door openers to thermostats to home appliances like dishwashers and all types of products in between. We view Microchip as one of the best-run firms within the chip space and like the firm’s ability to generate free cash flow under virtually any economic scenario.

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Price vs Fair Value

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MCHP is trading at a 5% discount.
Price
$85.07
Fair Value
$46.00
Uncertainty
Medium
1-Star Price
$174.30
5-Star Price
$66.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Microchip sells to tens of thousands of end customers, so it is not overly dependent on sales to any one client or market segment.

Bears

If U.S.-China trade tensions continue, customers in China may gravitate to analog and embedded parts made by Microchip’s neutral Europe-based rivals, such as STMicro, Infineon, or NXP.

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Trading Information

Previous Close Price
$85.07
Day Range
$83.78–85.92
52-Week Range
$68.75–94.30
Bid/Ask
$83.55 / $84.21
Market Cap
$45.51 Bil
Volume/Avg
4.9 Mil / 5.5 Mil

Key Statistics

Price/Earnings (Normalized)
14.22
Price/Sales
5.48
Dividend Yield (Trailing)
1.98%
Dividend Yield (Forward)
1.98%
Total Yield
3.64%

Company Profile

Microchip Technology became an independent company in 1989 when it was spun off from General Instrument. More than half of revenue comes from MCUs, which are used in a wide array of electronic devices from remote controls to garage door openers to power windows in autos. The company's strength lies in lower-end 8-bit MCUs that are suitable for a wider range of less technologically advanced devices, but the firm has expanded its presence in higher-end MCUs and analog chips as well.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Mid Core
Total Number of Employees
22,600
Website
https://www.microchip.com

Competitors

Valuation

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Metric
MCHP
NXPI
TXN
Price/Earnings (Normalized)
 14.2216.1723.77
Price/Book Value
 6.496.758.95
Price/Sales
 5.484.478.70
Price/Cash Flow
 13.2414.5120.27
Price/Earnings
MCHP
NXPI
TXN

Financial Strength

Metric
MCHP
NXPI
TXN
Quick Ratio
 0.581.203.27
Current Ratio
 1.031.914.55
Interest Coverage
 18.478.2322.01
Quick Ratio
MCHP
NXPI
TXN

Profitability

Metric
MCHP
NXPI
TXN
Return on Assets (Normalized)
 21.82%15.37%22.56%
Return on Equity (Normalized)
 54.48%44.97%43.06%
Return on Invested Capital (Normalized)
 28.31%19.74%27.08%
Return on Assets
MCHP
NXPI
TXN
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Semiconductors Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
NVDA
NVIDIA CorpWtcpxqnvndBycm$2.1 Tril
TSM
Taiwan Semiconductor Manufacturing Co Ltd ADRVhccgywsWnkr$641.0 Bil
AVGO
Broadcom IncVvndsvlvKldn$594.4 Bil
AMD
Advanced Micro Devices IncTkqdhssrMpsjgn$248.9 Bil
QCOM
Qualcomm IncZnxmpbhGkcgykr$183.4 Bil
INTC
Intel CorpDtptdjjrJhlx$151.9 Bil
TXN
Texas Instruments IncXqfchftwcWfcrw$150.8 Bil
MU
Micron Technology IncTvyyqgfnMwlbt$134.8 Bil
ARM
ARM Holdings PLC ADRSbbbqlyRgmq$110.6 Bil
ADI
Analog Devices IncKcflslqhLpcl$93.9 Bil

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