Head-To-Head Comparison: Broadcom (NASDAQ:AVGO) vs. Canaan (NASDAQ:CAN)

Broadcom (NASDAQ:AVGO) and Canaan (NASDAQ:CAN) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Broadcom	11.43%	28.00%	11.16%
Canaan	-128.85%	-60.37%	-42.71%

Analyst Ratings

This is a summary of current ratings and target prices for Broadcom and Canaan, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadcom	0	2	25	0	2.93
Canaan	0	1	3	0	2.75

Broadcom presently has a consensus price target of $231.48, indicating a potential upside of 18.73%. Canaan has a consensus price target of $4.33, indicating a potential upside of 241.21%. Given Canaan’s higher probable upside, analysts clearly believe Canaan is more favorable than Broadcom.

Institutional and Insider Ownership

76.4% of Broadcom shares are held by institutional investors. Comparatively, 70.1% of Canaan shares are held by institutional investors. 2.0% of Broadcom shares are held by insiders. Comparatively, 0.3% of Canaan shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Broadcom has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Canaan has a beta of 3.39, meaning that its share price is 239% more volatile than the S&P 500.

Earnings and Valuation

This table compares Broadcom and Canaan”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadcom	$51.57 billion	17.72	$5.90 billion	$1.23	158.50
Canaan	$229.63 million	1.56	-$414.15 million	($1.35)	-0.94

Broadcom has higher revenue and earnings than Canaan. Canaan is trading at a lower price-to-earnings ratio than Broadcom, indicating that it is currently the more affordable of the two stocks.

Summary

Broadcom beats Canaan on 12 of the 14 factors compared between the two stocks.

About Broadcom

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices. The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.

About Canaan

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components in the People's Republic of China. It is also involved in the assembly and distribution of mining equipment and spare parts. The company has operations in the United States, Australia, Kazakhstan, Hong Kong, Canada, Mainland China, Thailand, Sweden, and internationally. Canaan Inc. was founded in 2013 and is based in Singapore.