Applied Materials (NASDAQ:AMAT) and SkyWater Technology (NASDAQ:SKYT) Head-To-Head Review

Applied Materials (NASDAQ:AMAT) and SkyWater Technology (NASDAQ:SKYT) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.

Insider & Institutional Ownership

80.6% of Applied Materials shares are owned by institutional investors. Comparatively, 70.0% of SkyWater Technology shares are owned by institutional investors. 0.3% of Applied Materials shares are owned by company insiders. Comparatively, 37.9% of SkyWater Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Applied Materials and SkyWater Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Materials	0	7	26	1	2.82
SkyWater Technology	2	5	1	0	1.88

Applied Materials currently has a consensus target price of $368.29, suggesting a potential downside of 8.72%. SkyWater Technology has a consensus target price of $32.00, suggesting a potential downside of 6.68%. Given SkyWater Technology’s higher possible upside, analysts clearly believe SkyWater Technology is more favorable than Applied Materials.

Risk and Volatility

Applied Materials has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, SkyWater Technology has a beta of 3.47, indicating that its stock price is 247% more volatile than the S&P 500.

Earnings & Valuation

This table compares Applied Materials and SkyWater Technology”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Materials	$28.21 billion	11.35	$7.00 billion	$9.77	41.30
SkyWater Technology	$442.14 million	3.81	$118.91 million	$2.43	14.11

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Materials	27.78%	37.52%	21.33%
SkyWater Technology	26.90%	-6.89%	-1.60%

Summary

Applied Materials beats SkyWater Technology on 12 of the 15 factors compared between the two stocks.

About Applied Materials

Applied Materials, Inc. engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits. This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising 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, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. The company was incorporated in 1967 and is headquartered in Santa Clara, California.

About SkyWater Technology

SkyWater Technology, Inc., together with its subsidiaries, operates as a pure-play technology foundry that engages in the provision of semiconductor development, manufacturing, and packaging services in the United States. The company offers engineering and process development support services to co-create technologies with customers; and semiconductor manufacturing services for various silicon-based analog and mixed-signal, micro-electromechanical systems, and rad-hard integrated circuits. It serves customers operating in the computation, aerospace and defense, automotive, bio-health, consumer, and industrial sectors. The company was incorporated in 2016 and is headquartered in Bloomington, Minnesota.