Applied Materials (NASDAQ:AMAT) vs. SCI Engineered Materials (OTCMKTS:SCIA) Critical Analysis

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

Risk & Volatility

Applied Materials has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500. Comparatively, SCI Engineered Materials has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Applied Materials and SCI Engineered Materials, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Materials	0	7	26	1	2.82
SCI Engineered Materials	0	0	0	0	0.00

Applied Materials currently has a consensus price target of $363.46, indicating a potential upside of 12.49%. Given Applied Materials’ stronger consensus rating and higher possible upside, research analysts clearly believe Applied Materials is more favorable than SCI Engineered Materials.

Earnings and Valuation

This table compares Applied Materials and SCI Engineered Materials”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Materials	$28.37 billion	9.04	$7.00 billion	$9.77	33.07
SCI Engineered Materials	$19.61 million	1.09	$1.75 million	$0.38	12.61

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

	Net Margins	Return on Equity	Return on Assets
Applied Materials	27.78%	37.52%	21.33%
SCI Engineered Materials	8.91%	12.67%	9.93%

Insider & Institutional Ownership

80.6% of Applied Materials shares are owned by institutional investors. Comparatively, 27.6% of SCI Engineered Materials shares are owned by institutional investors. 0.3% of Applied Materials shares are owned by insiders. Comparatively, 19.7% of SCI Engineered Materials shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Applied Materials beats SCI Engineered Materials on 14 of the 15 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 SCI Engineered Materials

SCI Engineered Materials, Inc. engages in the manufacture and supply of materials for physical vapor deposition thin film applications in the United States. It offers ceramic targets, metal sputtering targets, and backing plates for use in semiconductors, thin film solar, flat panel displays, defense, aerospace, and photonics industries. The company’s materials are used to produce nano layers of metals and oxides for advanced material systems; and in applying decorative coatings for end uses, such as sink faucets to produce various electronic, photonic, and semiconductor products. It serves domestic and multi-national corporations, universities, and research institutions. The company was formerly known as Superconductive Components, Inc. and changed its name to SCI Engineered Materials, Inc. in 2007. SCI Engineered Materials, Inc. was incorporated in 1987 and is headquartered in Columbus, Ohio.