SemiLEDS (NASDAQ:LEDS) & Applied Materials (NASDAQ:AMAT) Financial Contrast

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

Institutional & Insider Ownership

76.3% of SemiLEDS shares are held by institutional investors. Comparatively, 80.6% of Applied Materials shares are held by institutional investors. 57.4% of SemiLEDS shares are held by company insiders. Comparatively, 0.3% of Applied Materials shares are held 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.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SemiLEDS	1	0	0	0	1.00
Applied Materials	0	7	26	1	2.82

Applied Materials has a consensus price target of $368.29, suggesting a potential downside of 6.60%. Given Applied Materials’ stronger consensus rating and higher probable upside, analysts clearly believe Applied Materials is more favorable than SemiLEDS.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SemiLEDS	-6.71%	-89.53%	-13.38%
Applied Materials	27.78%	37.52%	21.33%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SemiLEDS	$34.51 million	0.33	-$1.13 million	($0.28)	-4.93
Applied Materials	$28.37 billion	11.03	$7.00 billion	$9.77	40.36

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

Volatility and Risk

SemiLEDS has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Applied Materials has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500.

Summary

Applied Materials beats SemiLEDS on 14 of the 15 factors compared between the two stocks.

About SemiLEDS

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips, LED components, and LED modules and systems in the United States, Taiwan, the Netherlands, Germany, Japan, and internationally. The company also sells enhanced vertical, LED product series in blue, white, green, and UV; LED chips to packagers or distributors; and lighting products primarily to original design manufacturers of lighting products and the end-users of lighting devices, as well as packs and sells its LED chips. Its products are used for general lighting applications, including commercial, industrial, and residential lighting; and specialty industrial applications, such as ultraviolet or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, germicidal and viricidal devices LED lighting for horticulture applications, architectural lighting, and entertainment lighting. The company was incorporated in 2005 and is based in Chu-Nan, Taiwan.

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.