SkyWater Technology (NASDAQ:SKYT) vs. Applied Materials (NASDAQ:AMAT) Critical Survey

SkyWater Technology (NASDAQ:SKYT) 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 dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Risk & Volatility

SkyWater Technology has a beta of 3.47, meaning that its stock price is 247% more 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.

Earnings & Valuation

This table compares SkyWater Technology and Applied Materials”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SkyWater Technology	$442.14 million	3.72	$118.91 million	$2.43	13.75
Applied Materials	$28.37 billion	10.96	$7.00 billion	$9.77	40.08

Applied Materials has higher revenue and earnings than SkyWater Technology. SkyWater 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SkyWater Technology	26.90%	-6.89%	-1.60%
Applied Materials	27.78%	37.52%	21.33%

Analyst Recommendations

This is a breakdown of current ratings for SkyWater Technology and Applied Materials, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SkyWater Technology	2	5	1	0	1.88
Applied Materials	0	7	26	1	2.82

SkyWater Technology presently has a consensus target price of $32.00, indicating a potential downside of 4.25%. Applied Materials has a consensus target price of $368.29, indicating a potential downside of 5.96%. Given SkyWater Technology’s higher probable upside, equities analysts clearly believe SkyWater Technology is more favorable than Applied Materials.

Institutional & Insider Ownership

70.0% of SkyWater Technology shares are held by institutional investors. Comparatively, 80.6% of Applied Materials shares are held by institutional investors. 37.9% of SkyWater Technology shares are held by insiders. Comparatively, 0.3% of Applied Materials shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Applied Materials beats SkyWater Technology on 12 of the 15 factors compared between the two stocks.

About SkyWater Technology

SkyWater Technology, Inc., together with its subsidiaries, operates as a pure-play technology foundry that engages in the provision of semiconductor development, manufacturing, and packaging services in the United States. The company offers engineering and process development support services to co-create technologies with customers; and semiconductor manufacturing services for various silicon-based analog and mixed-signal, micro-electromechanical systems, and rad-hard integrated circuits. It serves customers operating in the computation, aerospace and defense, automotive, bio-health, consumer, and industrial sectors. The company was incorporated in 2016 and is headquartered in Bloomington, Minnesota.

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.