NXP Semiconductors (NASDAQ:NXPI) versus Lam Research (NASDAQ:LRCX) Head to Head Contrast

NXP Semiconductors (NASDAQ:NXPI) and Lam Research (NASDAQ:LRCX) are both large-cap technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NXP Semiconductors	22.56%	27.83%	11.07%
Lam Research	31.27%	67.60%	33.48%

Volatility & Risk

NXP Semiconductors has a beta of 1.81, indicating that its stock price is 81% more volatile than the S&P 500. Comparatively, Lam Research has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500.

Dividends

NXP Semiconductors pays an annual dividend of $4.05 per share and has a dividend yield of 1.8%. Lam Research pays an annual dividend of $1.32 per share and has a dividend yield of 0.4%. NXP Semiconductors pays out 34.6% of its earnings in the form of a dividend. Lam Research pays out 22.9% 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 increased its dividend for 10 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for NXP Semiconductors and Lam Research, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NXP Semiconductors	1	9	16	0	2.58
Lam Research	0	5	26	1	2.88

NXP Semiconductors currently has a consensus target price of $305.43, indicating a potential upside of 34.06%. Lam Research has a consensus target price of $358.97, indicating a potential upside of 16.68%. Given NXP Semiconductors’ higher possible upside, equities research analysts plainly believe NXP Semiconductors is more favorable than Lam Research.

Valuation & Earnings

This table compares NXP Semiconductors and Lam Research”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NXP Semiconductors	$13.19 billion	4.36	$2.02 billion	$11.72	19.44
Lam Research	$23.23 billion	16.57	$7.27 billion	$5.76	53.41

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.

Institutional and Insider Ownership

90.5% of NXP Semiconductors shares are owned by institutional investors. Comparatively, 84.6% of Lam Research shares are owned by institutional investors. 0.1% of NXP Semiconductors shares are owned by insiders. Comparatively, 0.3% of Lam Research shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Lam Research beats NXP Semiconductors on 14 of the 18 factors compared between the two stocks.

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.

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.