Applied Materials, Inc. (AMAT) vs Teradyne, Inc. (TER)

Applied Materials, Inc. and Teradyne, Inc. are both Semiconductor Equipment & Materials companies. Applied Materials, Inc. is the larger, with a market value of $382.9B against $62.4B — 6.1× the size. Applied Materials, Inc. trades at the lower P/E: 41.6× against 54.3×. Teradyne, Inc. grew revenue faster over the last twelve months: 57.9% against 7.77%. Applied Materials, Inc. has the higher net margin (30.1% vs 25.8%) and the lower return on invested capital (24.9% vs 27.0%). Both pay a dividend; Applied Materials, Inc. yields more (0.71% vs 0.47%). Across the 23 metrics below, Applied Materials, Inc. leads on 16 and Teradyne, Inc. on 7.

Valuation

Metric AMAT TER Semiconductor Equipment & Materials median
P/E 41.56 54.35 54.39
P/S 12.49 13.96 6.08
P/B 15.03 17.95 4.89
Price to free cash flow 66.95 77.92 60.92
EV/EBITDA 39.55 42.01 39.95
EV/Sales 12.40 13.94 6.36
Earnings yield 2.41% 1.84% 1.14%
Free cash flow yield 1.49% 1.28% 1.28%

Profitability

Metric AMAT TER Semiconductor Equipment & Materials median
Gross margin 49.40% 59.24% 43.95%
Operating margin 29.64% 30.23% 10.32%
Net margin 30.05% 25.77% 7.45%
Free cash flow margin 18.25% 17.92% 6.77%
Return on equity 41.07% 36.45% 4.78%
Return on assets 23.84% 26.48% 3.62%
Return on invested capital 24.91% 27.04% 6.10%

Growth

Metric AMAT TER Semiconductor Equipment & Materials median
Revenue growth (TTM) 7.77% 57.87% 14.60%
EPS growth (last fiscal year) 0.58% 4.52% —
Revenue growth, 5-year CAGR 10.52% 0.44% 8.85%
Net income growth, 5-year CAGR 14.10% (6.71%) 0.00%

Health

Metric AMAT TER Semiconductor Equipment & Materials median
Debt to equity 0.26 0.00 0.09
Current ratio 2.42 2.12 3.66
Net debt to EBITDA (0.23) (0.16) (0.49)

Dividend

Metric AMAT TER Semiconductor Equipment & Materials median
Dividend yield 0.71% 0.47% 0.85%
Payout ratio 0.15 0.13 0.00

Size

Metric AMAT TER Semiconductor Equipment & Materials median
Market cap 382.88b 62.38b 4.63b

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