Lam Research (NASDAQ:LRCX) & Himax Technologies (NASDAQ:HIMX) Critical Comparison

Lam Research (NASDAQ:LRCX) and Himax Technologies (NASDAQ:HIMX) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Insider & Institutional Ownership

84.6% of Lam Research shares are held by institutional investors. Comparatively, 69.8% of Himax Technologies shares are held by institutional investors. 0.3% of Lam Research shares are held by company insiders. Comparatively, 31.5% of Himax Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Lam Research and Himax Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lam Research	29.07%	58.17%	26.42%
Himax Technologies	8.34%	8.34%	4.49%

Dividends

Lam Research pays an annual dividend of $1.04 per share and has a dividend yield of 0.8%. Himax Technologies pays an annual dividend of $0.36 per share and has a dividend yield of 4.4%. Lam Research pays out 25.0% of its earnings in the form of a dividend. Himax Technologies pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lam Research has raised its dividend for 10 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations for Lam Research and Himax Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lam Research	0	8	23	0	2.74
Himax Technologies	0	1	2	0	2.67

Lam Research currently has a consensus price target of $121.00, indicating a potential downside of 7.89%. Himax Technologies has a consensus price target of $11.90, indicating a potential upside of 46.37%. Given Himax Technologies’ higher possible upside, analysts clearly believe Himax Technologies is more favorable than Lam Research.

Valuation & Earnings

This table compares Lam Research and Himax Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lam Research	$18.44 billion	8.99	$5.36 billion	$4.16	31.58
Himax Technologies	$906.80 million	1.57	$79.75 million	$0.42	19.36

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

Volatility and Risk

Lam Research has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500. Comparatively, Himax Technologies has a beta of 2.31, suggesting that its share price is 131% more volatile than the S&P 500.

Summary

Lam Research beats Himax Technologies on 13 of the 17 factors compared between the two stocks.

About Lam Research

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. The company was incorporated in 1980 and is headquartered in Fremont, California.

About Himax Technologies

Himax Technologies, Inc., a fabless semiconductor company, provides display imaging processing technologies in China, Taiwan, the Philippines, Korea, Japan, Europe, and the United States. The company operates in two segments, Driver IC and Non-Driver Products. It offers display driver integrated circuits (ICs) and timing controllers that are used in televisions, PC monitors, laptops, mobile phones, tablets, automotive, ePaper devices, industrial displays, and other products. The company also provides automotive IC solutions, including traditional driver ICs; advanced in-cell touch and display driver integration; large touch and display driver integration; and local dimming timing controllers, as well as active matrix organic light-emitting diode (AMOLED) solutions, including AMOLED drivers, timing controllers, and touch controller ICs. In addition, it offers application specific IC services; liquid crystal on silicon and micro-electro mechanical system products; Power ICs; complementary metal oxide semiconductor image sensor products; wafer level optics products; 3D sensing products; and ultralow power WiseEye smart image sensing products. The company markets its display drivers to panel manufacturers, mobile device module manufacturers, and manufacturers of end-use products. Himax Technologies, Inc. was incorporated in 2001 and is headquartered in Tainan City, Taiwan.