322.38 USD
+3.59 (+1.13%)
321.23 USD
-1.15 (-0.36%)
Taking everything into account, AMAT scores 7 out of 10 in our fundamental rating. AMAT was compared to 113 industry peers in the Semiconductors & Semiconductor Equipment industry. Both the health and profitability get an excellent rating, making AMAT a very profitable company, without any liquidiy or solvency issues. AMAT has a correct valuation and a medium growth rate. With these ratings, AMAT could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
- In the past year AMAT was profitable.
- In the past year AMAT had a positive cash flow from operations.
- AMAT had positive earnings in each of the past 5 years.
- Each year in the past 5 years AMAT had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 19.28%, AMAT belongs to the top of the industry, outperforming 92.92% of the companies in the same industry.
- AMAT's Return On Equity of 34.28% is amongst the best of the industry. AMAT outperforms 93.81% of its industry peers.
- AMAT has a Return On Invested Capital of 24.38%. This is amongst the best in the industry. AMAT outperforms 95.58% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for AMAT is significantly above the industry average of 10.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.28% | ||
| ROE | 34.28% | ||
| ROIC | 24.38% |
ROA(3y)20.82%
ROA(5y)21.93%
ROE(3y)38%
ROE(5y)43.11%
ROIC(3y)25.04%
ROIC(5y)27.65%
1.3 Margins
- Looking at the Profit Margin, with a value of 24.67%, AMAT belongs to the top of the industry, outperforming 82.30% of the companies in the same industry.
- AMAT's Profit Margin has improved in the last couple of years.
- AMAT has a better Operating Margin (29.86%) than 90.27% of its industry peers.
- In the last couple of years the Operating Margin of AMAT has grown nicely.
- AMAT has a Gross Margin (48.67%) which is comparable to the rest of the industry.
- AMAT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.86% | ||
| PM (TTM) | 24.67% | ||
| GM | 48.67% |
OM growth 3Y-0.37%
OM growth 5Y3.31%
PM growth 3Y-0.85%
PM growth 5Y3.24%
GM growth 3Y1.53%
GM growth 5Y1.71%
2. Health
2.1 Basic Checks
- AMAT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- AMAT has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for AMAT has been reduced compared to 5 years ago.
- AMAT has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 13.70 indicates that AMAT is not in any danger for bankruptcy at the moment.
- The Altman-Z score of AMAT (13.70) is better than 78.76% of its industry peers.
- AMAT has a debt to FCF ratio of 1.15. This is a very positive value and a sign of high solvency as it would only need 1.15 years to pay back of all of its debts.
- AMAT has a Debt to FCF ratio of 1.15. This is in the better half of the industry: AMAT outperforms 74.34% of its industry peers.
- A Debt/Equity ratio of 0.32 indicates that AMAT is not too dependend on debt financing.
- AMAT's Debt to Equity ratio of 0.32 is on the low side compared to the rest of the industry. AMAT is outperformed by 62.83% of its industry peers.
- Although AMAT does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.15 | ||
| Altman-Z | 13.7 |
ROIC/WACC2.26
WACC10.79%
2.3 Liquidity
- AMAT has a Current Ratio of 2.61. This indicates that AMAT is financially healthy and has no problem in meeting its short term obligations.
- AMAT has a Current ratio (2.61) which is in line with its industry peers.
- A Quick Ratio of 1.90 indicates that AMAT should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.90, AMAT is in line with its industry, outperforming 42.48% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.61 | ||
| Quick Ratio | 1.9 |
3. Growth
3.1 Past
- AMAT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.78%, which is quite good.
- Measured over the past years, AMAT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.65% on average per year.
- AMAT shows a small growth in Revenue. In the last year, the Revenue has grown by 4.39%.
- The Revenue has been growing by 10.52% on average over the past years. This is quite good.
EPS 1Y (TTM)8.78%
EPS 3Y6.91%
EPS 5Y17.65%
EPS Q2Q%-6.47%
Revenue 1Y (TTM)4.39%
Revenue growth 3Y3.23%
Revenue growth 5Y10.52%
Sales Q2Q%-3.48%
3.2 Future
- Based on estimates for the next years, AMAT will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.04% on average per year.
- AMAT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.57% yearly.
EPS Next Y2.89%
EPS Next 2Y11.54%
EPS Next 3Y9.31%
EPS Next 5Y11.04%
Revenue Next Year2.32%
Revenue Next 2Y8%
Revenue Next 3Y6.59%
Revenue Next 5Y6.57%
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 34.22, AMAT can be considered very expensive at the moment.
- 79.65% of the companies in the same industry are more expensive than AMAT, based on the Price/Earnings ratio.
- AMAT is valuated rather expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- AMAT is valuated quite expensively with a Price/Forward Earnings ratio of 33.26.
- 66.37% of the companies in the same industry are more expensive than AMAT, based on the Price/Forward Earnings ratio.
- AMAT's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.22 | ||
| Fwd PE | 33.26 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AMAT indicates a somewhat cheap valuation: AMAT is cheaper than 69.91% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of AMAT indicates a somewhat cheap valuation: AMAT is cheaper than 76.99% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.07 | ||
| EV/EBITDA | 28.13 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AMAT does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of AMAT may justify a higher PE ratio.
PEG (NY)11.82
PEG (5Y)1.94
EPS Next 2Y11.54%
EPS Next 3Y9.31%
5. Dividend
5.1 Amount
- AMAT has a yearly dividend return of 0.58%, which is pretty low.
- AMAT's Dividend Yield is a higher than the industry average which is at 0.51.
- With a Dividend Yield of 0.58, AMAT pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.58% |
5.2 History
- On average, the dividend of AMAT grows each year by 14.79%, which is quite nice.
- AMAT has paid a dividend for at least 10 years, which is a reliable track record.
- AMAT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.79%
Div Incr Years7
Div Non Decr Years19
5.3 Sustainability
- AMAT pays out 19.78% of its income as dividend. This is a sustainable payout ratio.
- The dividend of AMAT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.78%
EPS Next 2Y11.54%
EPS Next 3Y9.31%
APPLIED MATERIALS INC / AMAT FAQ
What is the fundamental rating for AMAT stock?
ChartMill assigns a fundamental rating of 7 / 10 to AMAT.
Can you provide the valuation status for APPLIED MATERIALS INC?
ChartMill assigns a valuation rating of 4 / 10 to APPLIED MATERIALS INC (AMAT). This can be considered as Fairly Valued.
How profitable is APPLIED MATERIALS INC (AMAT) stock?
APPLIED MATERIALS INC (AMAT) has a profitability rating of 9 / 10.
What is the valuation of APPLIED MATERIALS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for APPLIED MATERIALS INC (AMAT) is 34.22 and the Price/Book (PB) ratio is 12.58.
Is the dividend of APPLIED MATERIALS INC sustainable?
The dividend rating of APPLIED MATERIALS INC (AMAT) is 5 / 10 and the dividend payout ratio is 19.78%.