NasdaqGS:AMAT

Stock Analysis Report

Executive Summary

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries.

Snowflake

Fundamentals

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Applied Materials's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.2%

AMAT

1.7%

US Semiconductor

1.0%

US Market


1 Year Return

54.8%

AMAT

19.8%

US Semiconductor

6.7%

US Market

Return vs Industry: AMAT exceeded the US Semiconductor industry which returned 19.8% over the past year.

Return vs Market: AMAT exceeded the US Market which returned 6.7% over the past year.


Share holder returns

AMATIndustryMarket
7 Day2.2%1.7%1.0%
30 Day0.8%-1.5%-1.8%
90 Day12.5%4.9%-1.8%
1 Year58.0%54.8%22.1%19.8%9.1%6.7%
3 Year94.3%86.2%80.8%70.1%46.1%36.6%
5 Year179.7%157.8%143.0%118.0%66.9%48.6%

Price Volatility Vs. Market

How volatile is Applied Materials's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Applied Materials undervalued based on future cash flows and its price relative to the stock market?

16.18x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: AMAT ($51.75) is trading above our estimate of fair value ($40.69)

Significantly Undervalued: AMAT is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: AMAT is good value based on its PE Ratio (16.2x) compared to the Semiconductor industry average (27.9x).

PE vs Market: AMAT is good value based on its PE Ratio (16.2x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: AMAT is poor value based on its PEG Ratio (1.1x)


Price Based on Value of Assets

PB vs Industry: AMAT is overvalued based on its PB Ratio (5.9x) compared to the US Semiconductor industry average (2.6x).


Next Steps

Future Growth

How is Applied Materials expected to perform in the next 1 to 3 years based on estimates from 24 analysts?

14.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: AMAT's forecast earnings growth (14.8% per year) is above the savings rate (2.7%).

Earnings vs Market: AMAT's earnings (14.8% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: AMAT's earnings are forecast to grow, but not significantly.

Revenue vs Market: AMAT's revenue (8.2% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: AMAT's revenue (8.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: AMAT's Return on Equity is forecast to be very high in 3 years time (40%).


Next Steps

Past Performance

How has Applied Materials performed over the past 5 years?

26.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: AMAT's earnings have grown significantly by 26.8% per year over the past 5 years.

Accelerating Growth: AMAT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AMAT had negative earnings growth (-6.8%) over the past year, making it difficult to compare to the Semiconductor industry average (-6.2%).


Return on Equity

High ROE: AMAT's Return on Equity (37.5%) is considered high.


Return on Assets

ROA vs Industry: AMAT has a higher Return on Assets than the Semiconductor industry average last year.


Return on Capital Employed

ROCE Improving: AMAT has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Applied Materials's financial position?


Financial Position Analysis

Short Term Liabilities: AMAT's short term assets ($10.0B) exceeds its short term liabilities ($3.8B)

Long Term Liabilities: AMAT's short term assets (10.0B) exceeds its long term liabilities (6.9B)


Debt to Equity History and Analysis

Debt Level: AMAT's debt to equity ratio (65.5%) is considered high

Reducing Debt: AMAT's debt to equity ratio has increased from 25.3% to 65.5% over the past 5 years.

Debt Coverage: AMAT's debt is well covered by operating cash flow (65.9%).

Interest Coverage: AMAT's interest payments on its debt are well covered by EBIT (30.2x coverage).


Balance Sheet

Inventory Level: AMAT has a high level of physical assets or inventory.

Debt Coverage by Assets: AMAT's debt is covered by short term assets (assets are 1.890430x debt).


Next Steps

Dividend

What is Applied Materials's current dividend yield, its reliability and sustainability?

1.70%

Expected Dividend Yield


Upcoming Dividend Payment

Purchase Applied Materials before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.6%marketbottom25%1.5%markettop25%3.8%industryaverage1.7%forecastin3Years1.7%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: AMAT's dividend (1.62%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: AMAT's dividend (1.62%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: AMAT's dividends per share have been stable in the past 10 years.

Growing Dividend: AMAT's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (25.6%), AMAT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AMAT's dividends in 3 years are forecast to be well covered by earnings (22.9% payout ratio).


Next Steps

Management

What is the CEO of Applied Materials's salary, the management and board of directors tenure and is there insider trading?

6.1yrs

Average management tenure


CEO

Gary Dickerson (62yo)

6.1yrs

Tenure

US$14,064,540

Compensation

Mr. Gary E. Dickerson has been an Executive Director of Applied Materials, Inc. since 2019. He has been the Chief Executive Officer and President of Applied Materials, Inc. since September 1, 2013 and June ...


CEO Compensation Analysis

Compensation vs. Market: Gary's total compensation ($USD14.06M) is about average for companies of similar size in the US market ($USD11.20M).

Compensation vs Earnings: Gary's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.1yrs

Average Tenure

57yo

Average Age

Experienced Management: AMAT's management team is seasoned and experienced (6.1 years average tenure).


Board Age and Tenure

8.3yrs

Average Tenure

63yo

Average Age

Experienced Board: AMAT's board of directors are considered experienced (8.3 years average tenure).


Insider Trading

Insider Buying: AMAT insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$1,340,89127 Sep 19
Steve Ghanayem
EntityIndividual
Role
Senior Key Executive
Senior Vice President of New Markets & Alliances Group
Shares25,727
Max PriceUS$52.12
SellUS$1,297,21409 Sep 19
Dennis Powell
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares25,218
Max PriceUS$51.44
SellUS$138,00030 Aug 19
Stephen Forrest
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
Max PriceUS$46.00
SellUS$1,067,50005 Apr 19
Steve Ghanayem
EntityIndividual
Role
Senior Key Executive
Senior Vice President of New Markets & Alliances Group
Shares25,000
Max PriceUS$42.70
SellUS$84,90005 Apr 19
Stephen Forrest
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$42.45
SellUS$5,834,77623 Mar 19
Omkaram Nalamasu
EntityIndividual
Role
Chief Technology Officer
Senior VP & CTO
Shares143,255
Max PriceUS$40.73

Ownership Breakdown


Management Team

  • Gary Dickerson (62yo)

    President

    • Tenure: 6.1yrs
    • Compensation: US$14.06m
  • Gino Addiego (60yo)

    Senior Vice President of Engineering

    • Tenure: 4.3yrs
    • Compensation: US$3.37m
  • Mike Sullivan

    Vice President of Investor Relations

    • Tenure: 10.8yrs
  • Steve Ghanayem (53yo)

    Senior Vice President of New Markets & Alliances Group

    • Tenure: 1.9yrs
    • Compensation: US$5.78m
  • Jay Kerley

    Group VP & Chief Information Officer

    • Tenure: 9.8yrs
  • Dan Durn (53yo)

    Senior VP & CFO

    • Tenure: 2.2yrs
    • Compensation: US$6.67m
  • Om Nalamasu (61yo)

    Senior VP & CTO

    • Tenure: 8.8yrs
    • Compensation: US$3.44m
  • Ali Salehpour (58yo)

    Senior Vice President of Services

    • Tenure: 6.1yrs
    • Compensation: US$4.81m
  • Charles Read (53yo)

    Corporate VP

    • Tenure: 6.1yrs
  • Prabu Raja (56yo)

    Senior Vice President of Semiconductor Products Group

    • Tenure: 1.9yrs
    • Compensation: US$5.87m

Board Members

  • Aart de Geus (65yo)

    Independent Director

    • Tenure: 12.3yrs
    • Compensation: US$316.54k
  • Judy Bruner (60yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$342.54k
  • Cy Morgan (81yo)

    Chairman Emeritus

    • Tenure: 10.6yrs
    • Compensation: US$454.23k
  • Gary Dickerson (62yo)

    President

    • Tenure: 6.1yrs
    • Compensation: US$14.06m
  • Stephen Forrest (69yo)

    Independent Director

    • Tenure: 11.3yrs
    • Compensation: US$329.56k
  • Dennis Powell (71yo)

    Independent Director

    • Tenure: 12.1yrs
    • Compensation: US$354.04k
  • Scott McGregor (63yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$325.58k
  • Tom Iannotti (63yo)

    Independent Chairman of the Board

    • Tenure: 2.6yrs
    • Compensation: US$480.29k
  • Adrianna Ma (45yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: US$334.04k
  • Alexander Karsner (52yo)

    Independent Director

    • Tenure: 11.1yrs
    • Compensation: US$314.54k

Company Information

Applied Materials, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Applied Materials, Inc.
  • Ticker: AMAT
  • Exchange: NasdaqGS
  • Founded: 1967
  • Industry: Semiconductor Equipment
  • Sector: Semiconductors
  • Market Cap: US$47.804b
  • Shares outstanding: 923.75m
  • Website: https://www.appliedmaterials.com

Number of Employees


Location

  • Applied Materials, Inc.
  • 3050 Bowers Avenue
  • PO Box 58039
  • Santa Clara
  • California
  • 95054
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AMATNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDDec 1972
AMAT *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 1972
AP2DB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972
4336SEHK (The Stock Exchange of Hong Kong Ltd.)YesCommon StockHKHKDDec 1972
AP2XTRA (XETRA Trading Platform)YesCommon StockDEEURDec 1972
AMATWBAG (Wiener Boerse AG)YesCommon StockATEURDec 1972

Biography

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. It operates through three segments: Semiconductor Systems, Applied Gl ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:15
End of Day Share Price2019/10/11 00:00
Earnings2019/07/28
Annual Earnings2018/10/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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