Monolithic Power Systems

Methodology

Monolithic Power's analog power management chips serve diversified end markets creating more earnings stability than commodity semiconductors, though technology cycles still impact results. Design wins in automotive, industrial, and computing provide growth visibility. The calculation works well for this analog specialist with predictable design win conversion cycles.

Methodology

Monolithic Power consistently commands premium PEG ratios reflecting exceptional design capabilities, diversified customer base, and strong competitive positioning in power management. While expensive versus commodity chip makers, innovation and margin expansion justify valuations. Compare to analog semiconductor peers like Texas Instruments while considering growth trajectory differences.

Methodology

Monolithic Power offers a modest dividend with management emphasizing share buybacks as the primary capital return mechanism alongside growth investments. The dividend adds some value though capital appreciation from market share gains dominates total returns. PEGY captures the income component though growth matters far more for this innovative semiconductor company.