Analyzing Applied Materials (NASDAQ:AMAT) and SCI Engineered Materials (OTCMKTS:SCIA)

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

Risk and Volatility

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

Profitability

This table compares SCI Engineered Materials and Applied Materials’ net margins, return on equity and return on assets.

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SCI Engineered Materials	$19.61 million	1.03	$1.75 million	$0.38	11.97
Applied Materials	$28.37 billion	10.46	$7.00 billion	$9.77	38.28

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.

Analyst Ratings

This is a summary of current ratings and recommmendations for SCI Engineered Materials and Applied Materials, as reported by MarketBeat.

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

Applied Materials has a consensus price target of $363.46, indicating a potential downside of 2.81%. Given Applied Materials’ stronger consensus rating and higher possible upside, analysts plainly believe Applied Materials is more favorable than SCI Engineered Materials.

Insider & Institutional Ownership

27.6% of SCI Engineered Materials shares are held by institutional investors. Comparatively, 80.6% of Applied Materials shares are held by institutional investors. 19.7% of SCI Engineered Materials shares are held by company insiders. Comparatively, 0.3% of Applied Materials shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Applied Materials beats SCI Engineered Materials on 14 of the 15 factors compared between the two stocks.

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.

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.