Reviewing Applied Materials (AMAT) and Qorvo (QRVO)

Applied Materials (NASDAQ:AMAT) and Qorvo (NASDAQ:QRVO) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Applied Materials 22.10% 47.88% 19.63%
Qorvo 4.31% 14.66% 11.46%

Analyst Recommendations

This is a summary of current ratings and price targets for Applied Materials and Qorvo, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Materials 0 6 17 0 2.74
Qorvo 0 11 12 0 2.52

Applied Materials presently has a consensus price target of $52.95, indicating a potential upside of 34.05%. Qorvo has a consensus price target of $76.52, indicating a potential upside of 22.83%. Given Applied Materials’ stronger consensus rating and higher possible upside, research analysts clearly believe Applied Materials is more favorable than Qorvo.

Earnings and Valuation

This table compares Applied Materials and Qorvo’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Materials $17.25 billion 2.17 $3.31 billion $4.45 8.88
Qorvo $3.09 billion 2.40 $133.13 million $5.25 11.87

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

Volatility and Risk

Applied Materials has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500. Comparatively, Qorvo has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Dividends

Applied Materials pays an annual dividend of $0.84 per share and has a dividend yield of 2.1%. Qorvo does not pay a dividend. Applied Materials pays out 18.9% of its earnings in the form of a dividend.

Institutional & Insider Ownership

76.4% of Applied Materials shares are held by institutional investors. Comparatively, 92.5% of Qorvo shares are held by institutional investors. 0.4% of Applied Materials shares are held by insiders. Comparatively, 0.9% of Qorvo shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Applied Materials beats Qorvo on 10 of the 16 factors compared between the two stocks.

About Applied Materials

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. It 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 and nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective 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, as well as equipment for flexible substrates. The company serves manufacturers of semiconductor wafers and chips, liquid crystal and organic light-emitting diode displays, and other electronic devices. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. Applied Materials, Inc. was founded in 1967 and is headquartered in Santa Clara, California.

About Qorvo

Qorvo, Inc. provides radio frequency (RF) solutions and technologies for mobile device, infrastructure, and defense and aerospace applications worldwide. It operates through Mobile Products (MP) and Infrastructure and Defense Products (IDP) segments. The MP segment offers cellular RF and WiFi solutions, bulk acoustic wave (BAW) and surface acoustic wave (SAW) filters, power amplifiers (PAs), low noise amplifiers (LNAs), switches, multi-band PAs and transmit modules, RF power management integrated circuits, diversity receive modules, antenna switch modules, antenna tuning and control solutions, modules incorporating PAs and duplexers, and modules incorporating switches, PAs, and duplexers. This segment supplies its solutions for use in mobile devices, including smartphones, notebook computers, wearables, tablets, and cellular-based applications for the Internet of Things (IoT). The IDP segment supplies RF solutions for communications and defense applications, such as high performance defense systems comprising radar, electronic warfare and communication systems, Wi-Fi customer premises equipment for home and work, high speed connectivity in long-term evolution and 5G base stations, cloud connectivity via data center communications and telecom transport, and automotive connectivity and other IoT, including smart home solutions. This segment provides gallium arsenide, gallium nitride power amplifiers, LNAs, switches, complementary metal oxide semiconductor system-on-a-chip solutions, premium BAW and SAW filter solutions, and various multichip and hybrid assemblies. The company sells its products directly to customers, as well as through a network of domestic and foreign sales representative firms and distributors to original equipment manufacturers and original design manufacturers. Qorvo, Inc. was founded in 1991 and is headquartered in Greensboro, North Carolina.

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