Ultra Clean Holdings (UCTT) versus Lam Research Corporation (LRCX) Financial Contrast
Ultra Clean Holdings (NASDAQ: UCTT) and Lam Research Corporation (NASDAQ:LRCX) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.
Institutional & Insider Ownership
76.2% of Ultra Clean Holdings shares are held by institutional investors. Comparatively, 94.7% of Lam Research Corporation shares are held by institutional investors. 2.6% of Ultra Clean Holdings shares are held by company insiders. Comparatively, 0.4% of Lam Research Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Risk & Volatility
Ultra Clean Holdings has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Lam Research Corporation has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500.
This is a summary of current ratings and price targets for Ultra Clean Holdings and Lam Research Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ultra Clean Holdings||0||2||4||0||2.67|
|Lam Research Corporation||0||2||17||0||2.89|
Ultra Clean Holdings presently has a consensus target price of $31.00, indicating a potential upside of 21.47%. Lam Research Corporation has a consensus target price of $210.44, indicating a potential upside of 0.90%. Given Ultra Clean Holdings’ higher possible upside, analysts plainly believe Ultra Clean Holdings is more favorable than Lam Research Corporation.
Lam Research Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 0.9%. Ultra Clean Holdings does not pay a dividend. Lam Research Corporation pays out 16.5% of its earnings in the form of a dividend.
This table compares Ultra Clean Holdings and Lam Research Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ultra Clean Holdings||7.55%||30.08%||16.80%|
|Lam Research Corporation||22.85%||30.19%||17.58%|
Earnings and Valuation
This table compares Ultra Clean Holdings and Lam Research Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ultra Clean Holdings||$753.55 million||1.13||$74.66 million||$1.88||13.57|
|Lam Research Corporation||$8.86 billion||3.82||$2.60 billion||$10.94||19.06|
Lam Research Corporation has higher revenue and earnings than Ultra Clean Holdings. Ultra Clean Holdings is trading at a lower price-to-earnings ratio than Lam Research Corporation, indicating that it is currently the more affordable of the two stocks.
Lam Research Corporation beats Ultra Clean Holdings on 13 of the 16 factors compared between the two stocks.
About Ultra Clean Holdings
Ultra Clean Holdings, Inc. is engaged in the design, engineering and manufacture of production tools, modules and subsystems the semiconductor capital equipment industry. The Company’s products include precision robotic solutions; gas delivery systems; a range of industrial and automation production equipment products; subsystems that includes wafer cleaning sub-systems, chemical delivery modules, top-plate assemblies, frame assemblies, and process modules. The Company offers its products for the semiconductor capital equipment and equipment industry segments. It also sells to the consumer, medical, energy, industrial, flat panel and research equipment industries. The Company is focused on providing specialized engineering and manufacturing solutions for these applications. It provides its original equipment manufacturing (OEM) customers an outsourced solution for the development, design, component sourcing, prototyping, engineering, manufacturing and testing of various systems.
About Lam Research Corporation
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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