Applied Materials (AMAT) and Its Competitors Head to Head Analysis

Applied Materials (NASDAQ: AMAT) is one of 122 publicly-traded companies in the “Semiconductors & related devices” industry, but how does it compare to its peers? We will compare Applied Materials to similar companies based on the strength of its analyst recommendations, institutional ownership, profitability, risk, valuation, dividends and earnings.

Insider and Institutional Ownership

78.5% of Applied Materials shares are held by institutional investors. Comparatively, 60.4% of shares of all “Semiconductors & related devices” companies are held by institutional investors. 0.4% of Applied Materials shares are held by insiders. Comparatively, 9.6% of shares of all “Semiconductors & related devices” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Applied Materials has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500. Comparatively, Applied Materials’ peers have a beta of 1.09, indicating that their average share price is 9% more volatile than the S&P 500.

Profitability

This table compares Applied Materials and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Materials 19.24% 49.00% 22.39%
Applied Materials Competitors -38.25% 3.93% 2.95%

Earnings & Valuation

This table compares Applied Materials and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Applied Materials $14.54 billion $3.43 billion 15.23
Applied Materials Competitors $3.01 billion $450.91 million 23.81

Applied Materials has higher revenue and earnings than its peers. Applied Materials is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Applied Materials and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Materials 0 3 19 1 2.91
Applied Materials Competitors 1495 5730 10901 616 2.57

Applied Materials presently has a consensus target price of $65.00, indicating a potential upside of 31.29%. As a group, “Semiconductors & related devices” companies have a potential upside of 13.67%. Given Applied Materials’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Applied Materials is more favorable than its peers.

Dividends

Applied Materials pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. Applied Materials pays out 12.3% of its earnings in the form of a dividend. As a group, “Semiconductors & related devices” companies pay a dividend yield of 1.7% and pay out 43.5% of their earnings in the form of a dividend.

Summary

Applied Materials beats its peers on 12 of the 15 factors compared.

About Applied Materials

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries worldwide. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells a range of manufacturing equipment used to fabricate semiconductor chips or integrated circuits. It offers products and technologies for transistor and interconnect fabrication, including epitaxy, ion implantation, oxidation and nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays, organic light-emitting diodes, and other display technologies for TVs, personal computers, electronic tablets, smart phones, and other consumer-oriented devices, as well as equipment for flexible substrates. The company serves manufacturers of semiconductor wafers and chips, liquid crystal and organic light-emitting diode displays, and other electronic devices. Applied Materials, Inc. was founded in 1967 and is headquartered in Santa Clara, California.

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