Financial Comparison: Alpha and Omega Semiconductor (NASDAQ:AOSL) vs. Applied Materials (NASDAQ:AMAT)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Materials	22.95%	39.50%	22.12%
Alpha and Omega Semiconductor	-3.46%	-0.23%	-0.18%

Earnings and Valuation

This table compares Applied Materials and Alpha and Omega Semiconductor”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Materials	$27.64 billion	4.04	$7.18 billion	$7.65	17.98
Alpha and Omega Semiconductor	$666.40 million	0.85	-$11.08 million	($0.80)	-24.01

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

Risk & Volatility

Applied Materials has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500. Comparatively, Alpha and Omega Semiconductor has a beta of 2.48, indicating that its share price is 148% more volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Materials	1	5	17	0	2.70
Alpha and Omega Semiconductor	1	0	2	0	2.33

Applied Materials presently has a consensus price target of $214.67, indicating a potential upside of 56.11%. Alpha and Omega Semiconductor has a consensus price target of $38.67, indicating a potential upside of 101.34%. Given Alpha and Omega Semiconductor’s higher probable upside, analysts clearly believe Alpha and Omega Semiconductor is more favorable than Applied Materials.

Insider & Institutional Ownership

80.6% of Applied Materials shares are owned by institutional investors. Comparatively, 79.0% of Alpha and Omega Semiconductor shares are owned by institutional investors. 0.2% of Applied Materials shares are owned by insiders. Comparatively, 16.9% of Alpha and Omega Semiconductor shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Applied Materials beats Alpha and Omega Semiconductor on 11 of the 14 factors compared between the two stocks.

About Applied Materials

Applied Materials, Inc. engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company 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/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and 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. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. The company was incorporated in 1967 and is headquartered in Santa Clara, California.

About Alpha and Omega Semiconductor

Alpha and Omega Semiconductor Limited designs, develops, and supplies power semiconductor products for computing, consumer electronics, communication, and industrial applications in Hong Kong, China, South Korea, the United States, and internationally. It offers power discrete products, including metal-oxide-semiconductor field-effect transistors (MOSFET), SRFETs, XSFET, electrostatic discharge, protected MOSFETs, high and mid-voltage MOSFETs, and insulated gate bipolar transistors for use in smart phone chargers, battery packs, notebooks, desktop and servers, data centers, base stations, graphics card, game boxes, TVs, AC adapters, power supplies, motor control, power tools, E-vehicles, white goods and industrial motor drives, UPS systems, solar inverters, and industrial welding. The company also provides power ICs that deliver power, as well as control and regulate the power management variables, such as the flow of current and level of voltage. Its power ICs are used in flat panel displays, TVs, notebooks, graphic cards, servers, DVD/Blu-Ray players, set-top boxes, and networking equipment. In addition, the company offers transient voltage suppressors, analog switch, and electromagnetic interference filter for notebooks, desktop PCs, tablets, flat panel displays, TVs, smart phones, and portable electronic devices; and 650V and 1200V SiC MOSFET. Alpha and Omega Semiconductor Limited was incorporated in 2000 and is headquartered in Sunnyvale, California.