Lam Research Corporation (LRCX) vs. ASML Holding N.V. (ASML) Critical Analysis
Lam Research Corporation (NASDAQ: LRCX) and ASML Holding N.V. (NASDAQ:ASML) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.
Insider & Institutional Ownership
94.2% of Lam Research Corporation shares are held by institutional investors. Comparatively, 16.1% of ASML Holding N.V. shares are held by institutional investors. 0.4% of Lam Research Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares Lam Research Corporation and ASML Holding N.V.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Lam Research Corporation||22.85%||30.19%||17.58%|
|ASML Holding N.V.||23.81%||19.82%||11.51%|
This is a summary of recent recommendations and price targets for Lam Research Corporation and ASML Holding N.V., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Lam Research Corporation||0||2||17||0||2.89|
|ASML Holding N.V.||0||5||11||0||2.69|
Lam Research Corporation currently has a consensus price target of $210.44, indicating a potential upside of 1.18%. ASML Holding N.V. has a consensus price target of $176.17, indicating a potential downside of 1.54%. Given Lam Research Corporation’s stronger consensus rating and higher probable upside, research analysts clearly believe Lam Research Corporation is more favorable than ASML Holding N.V..
Valuation & Earnings
This table compares Lam Research Corporation and ASML Holding N.V.’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Lam Research Corporation||$8.86 billion||3.81||$2.60 billion||$10.94||19.01|
|ASML Holding N.V.||$9.33 billion||8.26||$3.27 billion||$5.05||35.43|
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.
Volatility and Risk
Lam Research Corporation has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, ASML Holding N.V. has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.
Lam Research Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 0.9%. 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 out 16.5% of its earnings in the form of a dividend. ASML Holding N.V. pays out 22.0% 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.
Lam Research Corporation beats ASML Holding N.V. on 11 of the 16 factors compared between the two stocks.
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.
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.
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