Contrasting Lattice Semiconductor (NASDAQ:LSCC) & Applied Materials (NASDAQ:AMAT)

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

Profitability

This table compares Lattice Semiconductor and Applied Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lattice Semiconductor 3.98% 17.47% 7.61%
Applied Materials 22.10% 47.88% 19.63%

Institutional and Insider Ownership

93.6% of Lattice Semiconductor shares are owned by institutional investors. Comparatively, 77.6% of Applied Materials shares are owned by institutional investors. 0.8% of Lattice Semiconductor shares are owned by insiders. Comparatively, 0.4% of Applied Materials shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Lattice Semiconductor and Applied Materials’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lattice Semiconductor $398.80 million 6.13 -$26.32 million $0.22 83.82
Applied Materials $17.25 billion 2.55 $3.31 billion $4.45 10.56

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

Volatility and Risk

Lattice Semiconductor has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Applied Materials has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500.

Dividends

Applied Materials pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. Lattice Semiconductor does not pay a dividend. Applied Materials pays out 18.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and recommmendations for Lattice Semiconductor and Applied Materials, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lattice Semiconductor 0 1 5 0 2.83
Applied Materials 0 8 14 0 2.64

Lattice Semiconductor currently has a consensus price target of $14.93, indicating a potential downside of 18.60%. Applied Materials has a consensus price target of $51.32, indicating a potential upside of 9.60%. Given Applied Materials’ higher possible upside, analysts plainly believe Applied Materials is more favorable than Lattice Semiconductor.

Summary

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

Lattice Semiconductor Company Profile

Lattice Semiconductor Corporation, together with its subsidiaries, develops and sells semiconductor technologies in Asia, Europe, and the Americas. The company offers field programmable gate arrays that consist of five product family lines, including the ECP, MachXO, iCE40, CrossLink, and programmable mixed signal devices. It also provides video connectivity application specific standard products, such as port processors, port controllers, video processors, transmitters, receivers, bridges, and converters for use in mobile phones, UHD TVs, home theater systems, HDMI cable extenders, automotive infotainment, PCs, accessories, projectors, and monitors. In addition, the company licenses its technology portfolio through standard IP and IP core licensing, patent monetization, and IP services. Lattice Semiconductor Corporation sells its products directly to end customers; and indirectly through a network of independent manufacturers' representatives and independent distributors. The company primarily serves original equipment manufacturers in the communications and computing, mobile and consumer, and industrial and automotive end markets. Lattice Semiconductor Corporation was founded in 1983 and is headquartered in Hillsboro, Oregon.

Applied Materials Company Profile

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.

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