Applied Materials vs Lam Research Which Is Stronger?

Applied Materials and Lam Research are two major players in the semiconductor industry, providing equipment and services to help manufacturers produce cutting-edge computer chips. Both companies have experienced significant growth in recent years as demand for high-performance microchips continues to surge. Investors looking to capitalize on this trend may consider investing in Applied Materials or Lam Research stocks. While both companies are likely to benefit from the industry's growth, differences in their business models and market positioning may influence their stock performance in the future.

Applied Materials or Lam Research?

When comparing Applied Materials and Lam Research, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Applied Materials and Lam Research.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Applied Materials has a dividend yield of 0.9%, while Lam Research has a dividend yield of 3.49%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Applied Materials reports a 5-year dividend growth of 11.75% year and a payout ratio of 15.76%. On the other hand, Lam Research reports a 5-year dividend growth of 10.89% year and a payout ratio of 25.87%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Applied Materials P/E ratio at 19.40 and Lam Research's P/E ratio at 24.42. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Applied Materials P/B ratio is 7.33 while Lam Research's P/B ratio is 11.70.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Applied Materials has seen a 5-year revenue growth of 0.85%, while Lam Research's is 1.10%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Applied Materials's ROE at 39.07% and Lam Research's ROE at 48.80%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $167.78 for Applied Materials and $75.44 for Lam Research. Over the past year, Applied Materials's prices ranged from $148.05 to $255.89, with a yearly change of 72.84%. Lam Research's prices fluctuated between $68.87 and $113.00, with a yearly change of 64.08%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.