Head to Head Analysis: ASML Holding N.V. (ASML) vs. Lam Research Corporation (LRCX)
ASML Holding N.V. (NASDAQ: ASML) and Lam Research Corporation (NASDAQ:LRCX) are both large-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.
ASML Holding N.V. pays an annual dividend of $1.11 per share and has a dividend yield of 0.6%. Lam Research Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 1.0%. ASML Holding N.V. pays out 24.3% of its earnings in the form of a dividend. Lam Research Corporation pays out 19.6% 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. Lam Research Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares ASML Holding N.V. and Lam Research Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ASML Holding N.V.||23.69%||18.48%||10.71%|
|Lam Research Corporation||21.19%||26.78%||14.96%|
Institutional and Insider Ownership
16.1% of ASML Holding N.V. shares are held by institutional investors. Comparatively, 94.0% of Lam Research Corporation shares are held by institutional investors. 0.4% of Lam Research Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of recent ratings for ASML Holding N.V. and Lam Research Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ASML Holding N.V.||0||6||10||0||2.63|
|Lam Research Corporation||0||3||16||0||2.84|
ASML Holding N.V. currently has a consensus target price of $180.20, suggesting a potential upside of 4.22%. Lam Research Corporation has a consensus target price of $179.00, suggesting a potential downside of 3.86%. Given ASML Holding N.V.’s higher probable upside, research analysts clearly believe ASML Holding N.V. is more favorable than Lam Research Corporation.
Risk and Volatility
ASML Holding N.V. has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Lam Research Corporation has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500.
Valuation and Earnings
This table compares ASML Holding N.V. and Lam Research Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ASML Holding N.V.||$9.33 billion||N/A||$3.27 billion||$4.57||37.83|
|Lam Research Corporation||$8.01 billion||3.78||$2.22 billion||$9.20||20.24|
ASML Holding N.V. has higher revenue and earnings than Lam Research Corporation. Lam Research Corporation is trading at a lower price-to-earnings ratio than ASML Holding N.V., indicating that it is currently the more affordable of the two stocks.
Lam Research Corporation beats ASML Holding N.V. on 10 of the 15 factors compared between the two stocks.
ASML Holding N.V. Company Profile
ASML Holding N.V. is a holding company. The Company is a manufacturer of chip-making equipment. The Company is engaged in the development, production, marketing, selling and servicing of semiconductor equipment systems, consisting of lithography systems. The Company’s products include systems, and installed base products and services. The Company’s principal operations are in the Netherlands, the United States and Asia. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for 300 millimeter processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems). The Company also offers NXE systems, which are equipped with extreme ultraviolet (EUV) light source technology. The Company offers YieldStar, a wafer metrology system.
Lam Research Corporation Company Profile
Lam Research Corporation is a supplier of wafer fabrication equipment and services to the semiconductor industry. The Company designs, manufactures, markets, refurbishes and services semiconductor processing systems that are used in the fabrication of integrated circuits (ICs). It operates through manufacturing and servicing of wafer processing semiconductor manufacturing equipment segment. Its products are designed to enable its customers build a range of devices that are used in a range of electronic products, including cell phones, tablets, computers, storage devices, and networking equipment. Its customer base includes semiconductor memory, foundry, and integrated device manufacturers (IDMs) that make products, such as dynamic random-access memory (DRAM), negative-AND (NAND) memory and logic devices. It offers a portfolio of products that are used in several areas of the semiconductor manufacturing process flow, including thin film deposition, plasma etch and single-wafer clean.
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