MaxLinear (NYSE: MXL) and Applied Materials (NASDAQ:AMAT) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.
Volatility and Risk
MaxLinear has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Applied Materials has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500.
This table compares MaxLinear and Applied Materials’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MaxLinear||$420.32 million||2.82||-$9.18 million||$1.18||14.75|
|Applied Materials||$14.54 billion||3.35||$3.43 billion||$3.25||14.87|
Applied Materials has higher revenue and earnings than MaxLinear. MaxLinear is trading at a lower price-to-earnings ratio than Applied Materials, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
91.9% of MaxLinear shares are owned by institutional investors. Comparatively, 78.6% of Applied Materials shares are owned by institutional investors. 11.5% of MaxLinear 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 stock will outperform the market over the long term.
This table compares MaxLinear and Applied Materials’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Applied Materials pays an annual dividend of $0.80 per share and has a dividend yield of 1.7%. MaxLinear does not pay a dividend. Applied Materials pays out 24.6% of its earnings in the form of a dividend.
This is a summary of recent ratings and target prices for MaxLinear and Applied Materials, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
MaxLinear presently has a consensus price target of $27.75, indicating a potential upside of 59.48%. Applied Materials has a consensus price target of $64.43, indicating a potential upside of 33.35%. Given MaxLinear’s higher probable upside, equities analysts clearly believe MaxLinear is more favorable than Applied Materials.
Applied Materials beats MaxLinear on 13 of the 17 factors compared between the two stocks.
MaxLinear Company Profile
MaxLinear, Inc. provides radio-frequency (RF), high-performance analog, and mixed-signal communications systems-on-chip solutions (SoCs) for the connected home, wired and wireless infrastructure, and industrial and multi-market applications worldwide. The company offers range of semiconductor products, such as RF receivers and RF receiver SoCs, wireless infrastructure backhaul RF receivers and modem SoCs, laser modulator drivers, transimpedance amplifiers, clock and data recovery circuits, interface solutions, power management products, and data encryption and compression products. It also provides range of electronic devices, including cable DOCSIS broadband modems and gateways; wireline connectivity devices for in-home networking applications; RF transceivers and modems; fiber-optic modules; video set-top boxes and gateways; hybrid analog and digital televisions, and direct broadcast satellite outdoor and indoor units; and power management and interface products. It sells its products to electronics distributors, module makers, original equipment manufacturers, and original design manufacturers through direct sales force, third party sales representatives, and a network of distributors. MaxLinear, Inc. was incorporated in 2003 and is headquartered in Carlsbad, California.
Applied Materials Company Profile
Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries worldwide. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells a range of manufacturing equipment used to fabricate semiconductor chips or integrated circuits. It offers products and technologies for transistor and interconnect fabrication, 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, including 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, 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. Applied Materials, Inc. was founded in 1967 and is headquartered in Santa Clara, California.
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