Applied Materials (NASDAQ: AMAT) and ACM Research (NASDAQ:ACMR) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Institutional & Insider Ownership

79.3% of Applied Materials shares are held by institutional investors. Comparatively, 1.0% of ACM Research shares are held by institutional investors. 0.4% of Applied Materials shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Applied Materials and ACM Research’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Materials 23.62% 41.51% 19.59%
ACM Research N/A N/A N/A

Valuation & Earnings

This table compares Applied Materials and ACM Research’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Materials $14.54 billion 3.59 $3.43 billion $3.17 15.63
ACM Research $27.37 million 3.08 $1.03 million ($0.19) -34.26

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

Dividends

Applied Materials pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. ACM Research does not pay a dividend. Applied Materials pays out 12.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Applied Materials and ACM Research, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Materials 0 0 21 1 3.05
ACM Research 0 0 3 0 3.00

Applied Materials currently has a consensus target price of $63.41, indicating a potential upside of 27.97%. ACM Research has a consensus target price of $10.00, indicating a potential upside of 53.61%. Given ACM Research’s higher possible upside, analysts plainly believe ACM Research is more favorable than Applied Materials.

Summary

Applied Materials beats ACM Research on 14 of the 16 factors compared between the two stocks.

Applied Materials Company Profile

Applied Materials, Inc. provides manufacturing equipment, services and software to the global semiconductor, display and related industries. The Company’s segments are Semiconductor Systems, which includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation; Applied Global Services, which provides integrated solutions to optimize equipment and fab performance and productivity; Display and Adjacent Markets, which includes products for manufacturing liquid crystal displays, organic light-emitting diodes, upgrades and roll-to-roll Web coating systems and other display technologies for televisions, personal computers, smart phones and other consumer-oriented devices, and Corporate and Other segment, which includes revenues from products, as well as costs of products sold for fabricating solar photovoltaic cells and modules, and certain operating expenses.

ACM Research Company Profile

Acm Research, Inc. develops, manufactures and sells single-wafer wet cleaning equipment, which semiconductor manufacturers uses in manufacturing steps to remove particles, contaminants and other random defects in fabricating integrated circuits, or chips. The Company’s Ultra C equipment is designed to remove random defects from a wafer surface, even at an advanced process node (the minimum line width on a chip) of 22 nanometers (nm) or less. Its equipment is based on its Space Alternated Phase Shift (SAPS) and Timely Energized Bubble Oscillation (TEBO) technologies. Its SAPS technology uses alternating phases of megasonic waves to deliver megasonic energy to flat and patterned wafer surfaces in a uniform manner on a microscopic level. Its TEBO technology provides cleaning for both conventional two-dimensional (2D) and three-dimensional (3D) patterned wafers at advanced process nodes.

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