Comparing Synaptics (NASDAQ:SYNA) & Lam Research (NASDAQ:LRCX)

Synaptics (NASDAQ:SYNA) and Lam Research (NASDAQ:LRCX) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Volatility and Risk

Synaptics has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500. Comparatively, Lam Research has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synaptics	$1.07 billion	3.28	-$47.80 million	($1.59)	-57.20
Lam Research	$18.44 billion	15.88	$5.36 billion	$4.88	48.05

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

Profitability

This table compares Synaptics and Lam Research’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synaptics	-5.41%	4.77%	2.58%
Lam Research	30.22%	62.81%	29.48%

Insider & Institutional Ownership

99.4% of Synaptics shares are held by institutional investors. Comparatively, 84.6% of Lam Research shares are held by institutional investors. 0.5% of Synaptics shares are held by insiders. Comparatively, 0.3% of Lam Research shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Synaptics and Lam Research, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synaptics	1	3	10	0	2.64
Lam Research	0	6	28	1	2.86

Synaptics presently has a consensus price target of $99.91, suggesting a potential upside of 9.86%. Lam Research has a consensus price target of $244.88, suggesting a potential upside of 4.44%. Given Synaptics’ higher possible upside, equities analysts plainly believe Synaptics is more favorable than Lam Research.

Summary

Lam Research beats Synaptics on 12 of the 15 factors compared between the two stocks.

About Synaptics

Synaptics Incorporated develops, markets, and sells semiconductor products worldwide. The company offers AudioSmart for voice and audio processing; ConnectSmart for high-speed video/audio/data connectivity; DisplayLink for transmitting compressed video frames across low bandwidth connections; VideoSmart that enables set-top boxes, over-the-top, streaming devices, soundbars, surveillance cameras, and smart displays; and ImagingSmart solutions. It also provides Natural ID, a fingerprint ID product that is used in notebook personal computers (PCs), PC peripherals, automobiles, and other applications; TouchPad, a touch-sensitive pad that senses the position and movement of one or more fingers on its surface; SecurePad that integrates fingerprint sensor directly into the TouchPad area; ClickPad that offers a clickable mechanical design; and ForcePad. In addition, the company offers ClearPad, which enables users to interact directly with the display on mobile smartphones, tablets, and automobiles; ClearView products that provide advanced image processing and low power technology for displays on smartphones and tablets; and TouchView products, a touch controller and display driver integration product. Further, it provides TouchPad with a pointing stick in a single notebook computer enabling users to select their interface of choice; TouchStyk, a self-contained pointing stick module; ultra-low power edge artificial intelligence platform for battery powered wireless devices; wireless connectivity solutions comprising Wi-Fi, Bluetooth, global positioning system, global navigation satellite system, and ULE; and voice over IP and digital enhanced cordless telecommunications solutions. The company sells its products through direct sales, outside sales representatives, distributors, and resellers to mobile and PC OEMs; IoT OEMs; and automotive and consumer electronics manufacturers. The company was incorporated in 1986 and is headquartered in San Jose, California.

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.