Head to Head Review: Silicon Laboratories (NASDAQ:SLAB) vs. Lam Research (NASDAQ:LRCX)

Lam Research (NASDAQ:LRCX) and Silicon Laboratories (NASDAQ:SLAB) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Insider & Institutional Ownership

84.6% of Lam Research shares are held by institutional investors. 0.3% of Lam Research shares are held by company insiders. Comparatively, 1.6% of Silicon Laboratories shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Lam Research has a beta of 1.85, suggesting that its stock price is 85% more volatile than the S&P 500. Comparatively, Silicon Laboratories has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Earnings and Valuation

This table compares Lam Research and Silicon Laboratories”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lam Research	$23.23 billion	16.06	$7.27 billion	$5.76	51.77
Silicon Laboratories	$855.89 million	8.59	-$64.91 million	($1.18)	-186.72

Lam Research has higher revenue and earnings than Silicon Laboratories. Silicon Laboratories is trading at a lower price-to-earnings ratio than Lam Research, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lam Research and Silicon Laboratories’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lam Research	31.27%	67.60%	33.48%
Silicon Laboratories	-4.57%	-0.66%	-0.57%

Analyst Recommendations

This is a breakdown of current recommendations for Lam Research and Silicon Laboratories, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lam Research	0	5	26	1	2.88
Silicon Laboratories	2	5	0	0	1.71

Lam Research presently has a consensus price target of $361.81, suggesting a potential upside of 21.32%. Silicon Laboratories has a consensus price target of $218.00, suggesting a potential downside of 1.06%. Given Lam Research’s stronger consensus rating and higher possible upside, analysts clearly believe Lam Research is more favorable than Silicon Laboratories.

Summary

Lam Research beats Silicon Laboratories on 14 of the 15 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 Silicon Laboratories

Silicon Laboratories Inc., a fabless semiconductor company, provides various analog-intensive mixed-signal solutions in the United States, China, Taiwan, and internationally. The company's products include wireless microcontrollers and sensor products. Its products are used in various electronic products in a range of applications for the industrial Internet of Things (IoT), including industrial automation and control, smart buildings, access control, HVAC control, and industrial wearables and power tools; smart cities applications, such as smart metering, smart street lighting, renewable energy, electric vehicle supply equipment, and smart agriculture; commercial IoT applications, including smart lighting, asset tracking, electronic shelf labels, theft protection, and enterprise access points; smart home applications, comprising home automation/security systems, smart speakers, smart lighting, HVAC control, smart cameras, smart appliances, smart home sensing, smart locks, and window/blind controls; and connected health applications, including diabetes management, consumer health and fitness, elderly care, patient monitoring, and activity tracking; as well as in commercial building automation, consumer electronics, and medical instrumentation. The company sells its products through its direct sales force, as well as through a network of independent sales representatives and distributors. Silicon Laboratories Inc. was founded in 1996 and is headquartered in Austin, Texas.