Lam Research (NASDAQ:LRCX – Get Free Report) and NXP Semiconductors (NASDAQ:NXPI – Get Free Report) are both large-cap technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.
Analyst Ratings
This is a summary of recent recommendations and price targets for Lam Research and NXP Semiconductors, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lam Research | 0 | 6 | 26 | 0 | 2.81 |
| NXP Semiconductors | 1 | 9 | 16 | 0 | 2.58 |
Lam Research presently has a consensus target price of $360.23, indicating a potential upside of 50.35%. NXP Semiconductors has a consensus target price of $295.78, indicating a potential upside of 11.92%. Given Lam Research’s stronger consensus rating and higher possible upside, analysts clearly believe Lam Research is more favorable than NXP Semiconductors.
Risk and Volatility
Lam Research has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500. Comparatively, NXP Semiconductors has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500.
Profitability
This table compares Lam Research and NXP Semiconductors’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lam Research | 32.34% | 72.15% | 36.92% |
| NXP Semiconductors | 23.40% | 28.57% | 11.87% |
Earnings and Valuation
This table compares Lam Research and NXP Semiconductors”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lam Research | $23.23 billion | 12.88 | $7.27 billion | $6.71 | 35.71 |
| NXP Semiconductors | $12.27 billion | 5.43 | $2.02 billion | $12.72 | 20.78 |
Lam Research has higher revenue and earnings than NXP Semiconductors. NXP Semiconductors is trading at a lower price-to-earnings ratio than Lam Research, indicating that it is currently the more affordable of the two stocks.
Dividends
Lam Research pays an annual dividend of $1.32 per share and has a dividend yield of 0.6%. NXP Semiconductors pays an annual dividend of $4.06 per share and has a dividend yield of 1.5%. Lam Research pays out 19.7% of its earnings in the form of a dividend. NXP Semiconductors pays out 31.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lam Research has raised its dividend for 10 consecutive years.
Insider & Institutional Ownership
84.6% of Lam Research shares are owned by institutional investors. Comparatively, 90.5% of NXP Semiconductors shares are owned by institutional investors. 0.3% of Lam Research shares are owned by insiders. Comparatively, 0.1% of NXP Semiconductors shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Lam Research beats NXP Semiconductors on 14 of the 17 factors compared between the two stocks.
About Lam Research
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. The company was incorporated in 1980 and is headquartered in Fremont, California.
About NXP Semiconductors
NXP Semiconductors N.V. offers various semiconductor products. The company's product portfolio includes microcontrollers; application processors, including i.MX application processors, and i.MX 8 and 9 family of applications processors; communication processors; wireless connectivity solutions, such as near field communications, ultra-wideband, Bluetooth low-energy, Zigbee, and Wi-Fi and Wi-Fi/Bluetooth integrated SoCs; analog and interface devices; radio frequency power amplifiers; and security controllers, as well as semiconductor-based environmental and inertial sensors, including pressure, inertial, magnetic, and gyroscopic sensors. Its products are used in various applications, including automotive, industrial and Internet of Things, mobile, and communication infrastructure. The company markets its products to various original equipment manufacturers, contract manufacturers, and distributors. It operates in China, the Netherlands, the United States, Singapore, Germany, Japan, South Korea, Taiwan, and internationally. N.V. was incorporated in 2006 and is headquartered in Eindhoven, the Netherlands.
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