Which IoT Companies Should I Invest In?

Jun 25, 2018 | GROWTH, STOCK PICKS

Despite the unforeseeable volatility of semiconductor stocks, the business that underlies the semiconductor industry is getting bigger. IoT allows everyday devices to be connected to the internet. Smart speakers are an example of an IoT product. The demand for microchips powering IoT devices will keep growing. This will be beneficial for semiconductor companies focusing on IoT products.

In 2018, IoT growth can benefit the six IoT companies listed below.

Cree (CREE)

Cree (NASDAQ: CREE) is a semiconductor manufacturer known for its SmartCast Technology. It is ranked #2 by Zacks among “Buy” stocks. The company’s stock has bullish signs since December 2017. Share prices have increased by over 10% in the last four weeks. Cree’s yearly EPS projections improved by about 36% in the previous quarter. Since 2017, Cree has outperformed Standard & Poor’s 500 by 76.11%

Cypress Semiconductor (CY)

Cypress (NASDAQ: CY) provides high-performing integrated circuits. Its WICED platform is a big IoT portfolio in the semiconductor industry. The firm paid $550 million for the acquisition of Broadcom’s IoT business.

Cypress’s stock is ranked #1 by Zacks in the “Strong Buy” category. This stock’s respective PE ratio is 17.3. The PEG ratio is 1.1. For now, the company’s projected earnings growth is greater than 16%. Cypress has a current dividend yield of 2.5%.

Intel (INTC)

Intel (NASDAQ: INTC) is globally known as a leading IoT business. This company’s stock is attractive because it has been broadly exposed to IoT and is extremely cheap. Intel has shifted from the PC market to the data market. Intel’s IoT solutions are useful in the auto, industrial, and retail sectors.

INTC carries a Zack’s Ranking #2 among “buy” stocks. Intel has very good financial health because it generates nearly $3.62 cash per share. The firm’s average net margin is 15%. Intel exceeded its earnings estimates by approximately 26%. Intel’s dividend yield is 2.7%.

ON Semiconductor (ON)

ON (NASDAQ: ON) is a manufacturer of PMICs and commodity ICs. The company began creating an IoT division. ON is ranked #2 by Zack’s among “Buy” stocks. The firm expects to announce an EPS growth rate of 86% in Q2 of 2018 and 11% for the entire twelvemonth. ON trades at a PE ratio of 12.23 and a price-sales ratio of 1.62.

Texas Instruments (TXN)

Beside manufacturing calculators, Texas Instruments (NASDAQ: TXN) supplies sophisticated semiconductors. Texas Instrument’s IoT profile belongs to the Embedded Processors division. In the trailing quarter, TXN’s Embedded Processors division had a YOY growth rate of 20%. TXN’s stock has a PE ratio of 20 and a PEG ratio of 2.11. As of now, Texas Instruments holds Zacks Rank #2 among “Buy” stocks.

Vishay Intertechnology (VSH)

Vishay Intertechnology (NYSE: VSH) is an American company that manufactures and supplies discrete semiconductors. Vishay’s earnings are expected to grow by 24.5% in 2018. The company’s forecasted revenue increase in 2018 is 15.5%. VSH is a good buy since it has a PE ratio of 13.7 and a PEG ratio of 2.3. Share prices increased 14% within the last month.

The most profitable companies in the IoT market are the ones developing the technology powering IoT products. Investors can benefit from the rising IoT tech market by finding companies making an investment in IoT.