ams-OSRAM (OTCMKTS:AMSSY) vs. Applied Materials (NASDAQ:AMAT) Critical Comparison

Applied Materials (NASDAQ:AMAT) and ams-OSRAM (OTCMKTS:AMSSY) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

Applied Materials pays an annual dividend of $2.12 per share and has a dividend yield of 0.4%. ams-OSRAM pays an annual dividend of $0.13 per share and has a dividend yield of 1.1%. Applied Materials pays out 19.9% of its earnings in the form of a dividend. ams-OSRAM pays out -10.8% 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. Applied Materials has raised its dividend for 8 consecutive years. ams-OSRAM is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Applied Materials has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500. Comparatively, ams-OSRAM has a beta of 1.74, suggesting that its share price is 74% more volatile than the S&P 500.

Earnings and Valuation

This table compares Applied Materials and ams-OSRAM”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Materials	$28.37 billion	16.88	$7.00 billion	$10.65	56.62
ams-OSRAM	$3.76 billion	0.63	-$147.08 million	($1.19)	-9.91

Applied Materials has higher revenue and earnings than ams-OSRAM. ams-OSRAM 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 Applied Materials and ams-OSRAM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Materials	29.31%	36.97%	21.30%
ams-OSRAM	-6.18%	0.79%	0.11%

Analyst Recommendations

This is a summary of recent ratings and price targets for Applied Materials and ams-OSRAM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Materials	0	7	27	1	2.83
ams-OSRAM	1	2	1	0	2.00

Applied Materials presently has a consensus price target of $553.56, suggesting a potential downside of 8.20%. Given Applied Materials’ stronger consensus rating and higher probable upside, equities analysts plainly believe Applied Materials is more favorable than ams-OSRAM.

Institutional and Insider Ownership

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

Summary

Applied Materials beats ams-OSRAM on 15 of the 18 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 ams-OSRAM

ams-OSRAM AG designs, manufactures, and sells LED and optical sensor solutions in Europe, the Middle East, Africa, the Americas, and Asia/Pacific. The company operates in Semiconductors and Lamps & Systems segments. The Semiconductors segment offers semiconductor-based products and solutions, such as high-performance LEDs, lasers, and optical sensors for automotive, consumer, and industrial and medical technology end markets. The Lamps & Systems segment provides lamps and lighting systems for the automotive, industrial, and medical end markets. The company was formerly known as ams AG and changed its name to ams-OSRAM AG in January 2022. ams-OSRAM AG is headquartered in Premstätten, Austria.