Reviewing ACM Research (ACMR) and Applied Materials (AMAT)

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

Insider & Institutional Ownership

6.3% of ACM Research shares are owned by institutional investors. Comparatively, 79.9% of Applied Materials shares are owned by institutional investors. 0.4% of Applied Materials shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Applied Materials pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. ACM Research does not pay a dividend. Applied Materials pays out 11.1% of its earnings in the form of a dividend.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ACM Research $27.37 million 3.10 $1.03 million ($0.19) -34.53
Applied Materials $14.54 billion 4.10 $3.43 billion $3.59 15.78

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

Analyst Ratings

This is a breakdown of current ratings for ACM Research and Applied Materials, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ACM Research 0 0 3 0 3.00
Applied Materials 0 0 21 1 3.05

ACM Research currently has a consensus price target of $10.00, suggesting a potential upside of 52.44%. Applied Materials has a consensus price target of $64.86, suggesting a potential upside of 14.48%. Given ACM Research’s higher possible upside, research analysts clearly believe ACM Research is more favorable than Applied Materials.

Profitability

This table compares ACM Research and Applied Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ACM Research N/A N/A N/A
Applied Materials 18.53% 45.17% 20.57%

Summary

Applied Materials beats ACM Research on 14 of the 16 factors compared between the two stocks.

ACM Research Company Profile

Acm Research, Inc. develops, manufactures and sells single-wafer wet cleaning equipment, which semiconductor manufacturers uses in manufacturing steps to remove particles, contaminants and other random defects in fabricating integrated circuits, or chips. The Company’s Ultra C equipment is designed to remove random defects from a wafer surface, even at an advanced process node (the minimum line width on a chip) of 22 nanometers (nm) or less. Its equipment is based on its Space Alternated Phase Shift (SAPS) and Timely Energized Bubble Oscillation (TEBO) technologies. Its SAPS technology uses alternating phases of megasonic waves to deliver megasonic energy to flat and patterned wafer surfaces in a uniform manner on a microscopic level. Its TEBO technology provides cleaning for both conventional two-dimensional (2D) and three-dimensional (3D) patterned wafers at advanced process nodes.

Applied Materials Company Profile

Applied Materials, Inc. provides manufacturing equipment, services and software to the global semiconductor, display and related industries. The Company’s segments are Semiconductor Systems, which includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation; Applied Global Services, which provides integrated solutions to optimize equipment and fab performance and productivity; Display and Adjacent Markets, which includes products for manufacturing liquid crystal displays, organic light-emitting diodes, upgrades and roll-to-roll Web coating systems and other display technologies for televisions, personal computers, smart phones and other consumer-oriented devices, and Corporate and Other segment, which includes revenues from products, as well as costs of products sold for fabricating solar photovoltaic cells and modules, and certain operating expenses.

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