Contrasting Applied Materials (NASDAQ:AMAT) & Amkor Technology (NASDAQ:AMKR)

Amkor Technology (NASDAQ:AMKR) and Applied Materials (NASDAQ:AMAT) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

Volatility & Risk

Amkor Technology has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500. Comparatively, Applied Materials has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500.

Profitability

This table compares Amkor Technology and Applied Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amkor Technology	5.57%	8.66%	4.83%
Applied Materials	27.78%	37.52%	21.33%

Institutional and Insider Ownership

42.8% of Amkor Technology shares are owned by institutional investors. Comparatively, 80.6% of Applied Materials shares are owned by institutional investors. 26.9% of Amkor Technology shares are owned by insiders. Comparatively, 0.3% of Applied Materials shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Amkor Technology pays an annual dividend of $0.33 per share and has a dividend yield of 0.7%. Applied Materials pays an annual dividend of $1.84 per share and has a dividend yield of 0.5%. Amkor Technology pays out 21.9% of its earnings in the form of a dividend. Applied Materials pays out 18.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Amkor Technology has increased its dividend for 4 consecutive years and Applied Materials has increased its dividend for 8 consecutive years.

Valuation and Earnings

This table compares Amkor Technology and Applied Materials”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amkor Technology	$6.71 billion	1.64	$373.89 million	$1.51	29.44
Applied Materials	$28.37 billion	9.43	$7.00 billion	$9.77	34.51

Applied Materials has higher revenue and earnings than Amkor Technology. Amkor Technology 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 and target prices for Amkor Technology and Applied Materials, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amkor Technology	0	8	3	0	2.27
Applied Materials	0	7	26	1	2.82

Amkor Technology presently has a consensus price target of $49.86, suggesting a potential upside of 12.16%. Applied Materials has a consensus price target of $363.46, suggesting a potential upside of 7.80%. Given Amkor Technology’s higher possible upside, equities analysts plainly believe Amkor Technology is more favorable than Applied Materials.

Summary

Applied Materials beats Amkor Technology on 14 of the 18 factors compared between the two stocks.

About Amkor Technology

Amkor Technology, Inc. provides outsourced semiconductor packaging and test services in the United States, Japan, Europe, the Middle East, Africa, and the Asia Pacific. It offers turnkey packaging and test services, including semiconductor wafer bump, wafer probe, wafer back-grind, package design, packaging, system-level and final test, and drop shipment services; flip chip scale package products for smartphones, tablets, and other mobile consumer electronic devices; flip chip stacked chip scale packages that are used to stack memory digital baseband, and as applications processors in mobile devices; flip-chip ball grid array packages for various networking, storage, computing, automotive, and consumer applications; and memory products for system memory or platform data storage. The company also provides wafer-level CSP packages for power management, transceivers, sensors, wireless charging, codecs, radar, and specialty silicon; wafer-level fan-out packages used in power management, transceivers, radar, and specialty silicon; silicon wafer integrated fan-out technology that replaces a laminate substrate with a thinner structure; leadframe packages for electronic devices and mixed-signal applications; and substrate-based wirebond packages used to connect a die to a substrate. In addition, it offers micro-electro-mechanical systems packages that are miniaturized mechanical and electromechanical devices; and advanced system-in-package modules used in radio frequency and front end modules, basebands, connectivity, fingerprint sensors, display and touch screen drivers, sensors and MEMS, and NAND memory and solid-state drives. Further, the company provides wafer, package, and system level test services, as well as burn-in test and test development services. It serves integrated device manufacturers, fabless semiconductor companies, original equipment manufacturers, and contract foundries. The company was founded in 1968 and is headquartered in Tempe, Arizona.

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.