Head to Head Contrast: Applied Materials (NASDAQ:AMAT) vs. Canaan (NASDAQ:CAN)

Applied Materials (NASDAQ:AMAT) and Canaan (NASDAQ:CAN) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Materials	$27.18 billion	5.20	$7.18 billion	$8.61	19.90
Canaan	$211.48 million	2.60	-$414.15 million	($1.35)	-1.35

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

	Net Margins	Return on Equity	Return on Assets
Applied Materials	26.41%	39.26%	21.92%
Canaan	-128.85%	-60.37%	-42.71%

Volatility and Risk

Applied Materials has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, Canaan has a beta of 3.06, indicating that its stock price is 206% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Applied Materials and Canaan, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Materials	0	7	14	0	2.67
Canaan	0	1	4	0	2.80

Applied Materials currently has a consensus price target of $222.05, suggesting a potential upside of 29.61%. Canaan has a consensus price target of $3.38, suggesting a potential upside of 85.44%. Given Canaan’s stronger consensus rating and higher probable upside, analysts plainly believe Canaan is more favorable than Applied Materials.

Institutional and Insider Ownership

80.6% of Applied Materials shares are held by institutional investors. Comparatively, 70.1% of Canaan shares are held by institutional investors. 0.3% of Applied Materials shares are held by company insiders. Comparatively, 0.3% of Canaan shares are held by company 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.

Summary

Applied Materials beats Canaan on 10 of the 13 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 Canaan

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components in the People's Republic of China. It is also involved in the assembly and distribution of mining equipment and spare parts. The company has operations in the United States, Australia, Kazakhstan, Hong Kong, Canada, Mainland China, Thailand, Sweden, and internationally. Canaan Inc. was founded in 2013 and is based in Singapore.