Head-To-Head Contrast: Canaan (NASDAQ:CAN) and Applied Materials (NASDAQ:AMAT)

Canaan (NASDAQ:CAN) and Applied Materials (NASDAQ:AMAT) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Risk & Volatility

Canaan has a beta of 3.06, suggesting that its share price is 206% more volatile than the S&P 500. Comparatively, Applied Materials has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Canaan and Applied Materials, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canaan	0	1	4	0	2.80
Applied Materials	0	7	14	0	2.67

Canaan currently has a consensus target price of $3.38, suggesting a potential upside of 62.26%. Applied Materials has a consensus target price of $222.05, suggesting a potential upside of 27.21%. Given Canaan’s stronger consensus rating and higher probable upside, equities analysts clearly believe Canaan is more favorable than Applied Materials.

Profitability

This table compares Canaan and Applied Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canaan	-128.85%	-60.37%	-42.71%
Applied Materials	26.41%	39.26%	21.92%

Valuation and Earnings

This table compares Canaan and Applied Materials”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canaan	$211.48 million	2.97	-$414.15 million	($1.35)	-1.54
Applied Materials	$27.18 billion	5.30	$7.18 billion	$8.61	20.27

Applied Materials has higher revenue and earnings than Canaan. Canaan is trading at a lower price-to-earnings ratio than Applied Materials, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

70.1% of Canaan shares are held by institutional investors. Comparatively, 80.6% of Applied Materials shares are held by institutional investors. 0.3% of Canaan shares are held by company insiders. Comparatively, 0.3% of Applied Materials shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Applied Materials beats Canaan on 10 of the 13 factors compared between the two stocks.

About Canaan

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components in the People's Republic of China. It is also involved in the assembly and distribution of mining equipment and spare parts. The company has operations in the United States, Australia, Kazakhstan, Hong Kong, Canada, Mainland China, Thailand, Sweden, and internationally. Canaan Inc. was founded in 2013 and is based in Singapore.

About Applied Materials

Applied Materials, Inc. engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits. This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays; organic light-emitting diodes; and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. The company was incorporated in 1967 and is headquartered in Santa Clara, California.