Analyzing CVD Equipment (CVV) & Lam Research (NASDAQ:LRCX)

CVD Equipment (NASDAQ:CVV) and Lam Research (NASDAQ:LRCX) are both industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CVD Equipment and Lam Research, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CVD Equipment 0 0 0 0 N/A
Lam Research 0 8 11 0 2.58

Lam Research has a consensus target price of $212.72, suggesting a potential upside of 10.33%. Given Lam Research’s higher possible upside, analysts plainly believe Lam Research is more favorable than CVD Equipment.

Dividends

Lam Research pays an annual dividend of $4.40 per share and has a dividend yield of 2.3%. CVD Equipment does not pay a dividend. Lam Research pays out 24.6% of its earnings in the form of a dividend. Lam Research has raised its dividend for 4 consecutive years.

Risk and Volatility

CVD Equipment has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Lam Research has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.

Profitability

This table compares CVD Equipment and Lam Research’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CVD Equipment -21.38% -13.32% -9.17%
Lam Research 26.69% 48.08% 24.80%

Institutional and Insider Ownership

17.5% of CVD Equipment shares are held by institutional investors. Comparatively, 89.1% of Lam Research shares are held by institutional investors. 20.1% of CVD Equipment shares are held by company insiders. Comparatively, 0.4% of Lam Research shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares CVD Equipment and Lam Research’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CVD Equipment $24.33 million 1.00 -$5.20 million N/A N/A
Lam Research $11.08 billion 2.66 $2.38 billion $17.87 10.79

Lam Research has higher revenue and earnings than CVD Equipment.

Summary

Lam Research beats CVD Equipment on 12 of the 14 factors compared between the two stocks.

About CVD Equipment

CVD Equipment Corporation develops, manufactures, and sells equipment and process solutions used to develop and manufacture materials and coatings for research and industrial applications in the United States and internationally. It operates through two segments, CVD/First Nano and SDC. The company offers chemical vapor deposition systems for use in the research, development, and manufacture of aerospace and medical components, semiconductors, LEDs, carbon nanotubes, nanowires, solar cells, and other industrial applications; and rapid thermal processing systems for use in implant activation, oxidation, silicide formation, and other processes. It also provides annealing, diffusion, and low pressure chemical vapor deposition furnaces for use in diffusion, oxidation, implant anneal, solder reflow, solar cell manufacturing, and other processes; and gas and liquid control systems, including gas cylinder storage cabinets, custom gas and chemical delivery systems, gas and liquid valve manifold boxes, and gas isolation boxes for semiconductor fabrication processes, solar cells, LEDs, carbon nanotubes, nanowires, and various industrial applications. In addition, the company offers standard and custom fabricated quartz-ware used in its equipment and other customer tools, as well as repair and replacement services for existing quartz-ware. Further, it provides MesoPlasma direct write printing, a materials deposition process that provides traces, patterns, and coatings onto conformal components; and Tantaline corrosion resistant coating for valves, fittings, fasteners, vessels, bellows, and various custom designed items. The company sells its products primarily to electronic component manufacturers, universities, and government and industrial laboratories, as well as aerospace and medical industries that require specialized coatings. CVD Equipment Corporation was founded in 1982 and is headquartered in Central Islip, New York.

About Lam Research

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits worldwide. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition product for copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatment; SPEED gapfill high-density plasma chemical vapor deposition (CVD) products; Striker single-wafer atomic layer deposition (ALD) products; and VECTOR plasma-enhanced CVD ALD products. It also provides 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. In addition, the company offers Coronus bevel clean products to enhance die yield; and Da Vinci, DV-Prime, EOS, SP to address a range of wafer cleaning. Further, it provides Metryx mass metrology systems for high aspect ratio etch, conformal and ALD/sidewall deposition, horizontal processing, film density monitoring, carbon mask open, and wafer cleaning/polymer removal applications; and legacy products. Lam Research Corporation was founded in 1980 and is headquartered in Fremont, California.

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