Skyworks Solutions (NASDAQ:SWKS) is winning in mobile. One look at it's trend line of revenue growth compared to competitors RF Micro Devices (RFMD) and Triquint Semiconductor (TQNT) drives this home. Avago Technology's (NASDAQ:AVGO) revenue is also trending up, but not as fast as Skyworks.
Skyworks makes a broad range of high performance analog and mix signal semiconductors that enable wireless connectivity. It sells products to almost every cell phone maker including Samsung (OTC:SSNLF) and Apple (NASDAQ:AAPL). The company also makes products for supporting automotive, broadband, cellular infrastructure, energy management, industrial, medical, and military.
Revenue has increased 53% in the last 8 quarters (Mar 2010 to Mar 2012) with sequential revenue guidance for the June quarter up another 5%. Non-GAAP earnings per share have gone from $0.24 in March 2010 to $0.42 in March 2012. Forward PE (fye Sep 30, 2013) is 13.1, cash is $306.5M or $1.62/share with zero debt (Data from Capital IQ).
With Skyworks in the new Samsung Galaxy S III cell phone and rumors of several wins in the upcoming Iphone 5, Skyworks should do well over the coming quarters.
Avago went public in August 2009, though its roots trace back more than 50 years to the components division of Hewlett-Packard (NYSE:HPQ). The company sells approximately 6,500 products to original equipment manufacturers of wireless communications, wired infrastructure, industrial and automotive electronics, and consumer and computing peripherals markets.
Revenue has increased 12% in the last 8 quarters (Apr 2010 to Apr 2012) with sequential revenue guidance for the June quarter up another 4.5%. Non-GAAP earnings per share have gone from $0.47 in March 2010 to $0.66 in March 2012. Forward PE (fye Oct 30, 2013) is 11.7, and cash is $954M or $3.91/share with only $4M in debt (Data from Capital IQ).
In the January 2011 quarter, Avago started a dividend at $0.07/share. It has increased the dividend every quarter since then with the July 2012 quarter at $0.15/share for an annual dividend rate of 1.8%.
RF Micro Devices
RF Micro Devices RF components and compound semiconductors. Its products provide connectivity and support functionality in the mobile devices, wireless infrastructure, wireless local area networks, cable television /broadband, Smart Energy/advanced metering infrastructure, and aerospace and defense markets.
Revenue has decreased 28% in the last 8 quarters (Mar 2010 to Mar 2012), with a sequential revenue guidance of up 7.5% for the June quarter. Non-GAAP earnings/share have also deteriorated during the same period... from $0.16 to a loss of $0.02. The company has been hit hard by the woes of one of it's largest customers Nokia (NYSE:NOK).
Forward PE (fye Mar 31, 2014) is 13.1, and cash minus debt is $148.5M or $0.53/share (Data from Capital IQ).
TriQuint Semiconductor provides RF products and technology for communications, defense, and aerospace companies. Triquint Semi has gotten some high profile wins in the past with Apple.
Revenue is up 20% in the last 8 quarters (Mar 2010 to Mar 2012), with a sequential revenue guidance of down 18.1% for the June quarter. Non-GAAP earnings/share have dropped $0.12 in March 2010 to $0.02 in March 2012. Forward PE (fye Dec 31, 2013) is 17.6, and cash is $195M or $1.16/share with zero debt (Data from Capital IQ).
In the mobile RF semiconductor space, Skyworks is the fastest growing, with Avago Technology in second place. One grows faster, but the other pays a dividend. Both are worth a look this summer, but I recommend exercising caution and not buying a full position all at once due to market volatility.