Brooks Automation (BRKS) and Lam Research (LRCX) Head to Head Analysis

Brooks Automation (NASDAQ: BRKS) and Lam Research (NASDAQ:LRCX) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Institutional and Insider Ownership

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90.3% of Brooks Automation shares are held by institutional investors. Comparatively, 90.1% of Lam Research shares are held by institutional investors. 2.4% of Brooks Automation shares are held by insiders. Comparatively, 0.4% of Lam Research shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Brooks Automation and Lam Research’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brooks Automation $692.89 million 3.00 $62.61 million $0.93 31.73
Lam Research $8.01 billion 4.51 $1.70 billion $9.07 24.47

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

Profitability

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

Net Margins Return on Equity Return on Assets
Brooks Automation 9.03% 14.43% 10.72%
Lam Research 17.60% 36.08% 20.19%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Brooks Automation and Lam Research, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brooks Automation 0 2 5 0 2.71
Lam Research 0 0 22 0 3.00

Brooks Automation presently has a consensus price target of $33.57, suggesting a potential upside of 13.76%. Lam Research has a consensus price target of $244.71, suggesting a potential upside of 10.27%. Given Brooks Automation’s higher probable upside, analysts plainly believe Brooks Automation is more favorable than Lam Research.

Volatility and Risk

Brooks Automation has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Lam Research has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Dividends

Brooks Automation pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Lam Research pays an annual dividend of $2.00 per share and has a dividend yield of 0.9%. Brooks Automation pays out 43.0% of its earnings in the form of a dividend. Lam Research pays out 22.1% 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.

Summary

Lam Research beats Brooks Automation on 11 of the 16 factors compared between the two stocks.

About Brooks Automation

Brooks Automation, Inc. is a provider of automation and cryogenic solutions for various applications and markets. The Company operates through two segments: Brooks Semiconductor Solutions Group and Brooks Life Science Systems. The Brooks Semiconductor Solutions Group segment offers critical automated transport, vacuum and contamination controls solutions and services. Its product offerings include robots and integrated automation systems for handling of substrates. It is also a provider of cryogenic components to create vacuum and thermal stability within critical operating environments in the manufacturing process. It also offers equipment for automated contamination control, conditioning and metrology solutions for wafer and reticle carriers. The Brooks Life Science Systems segment offers sample life cycle management solutions that provide life science and bioscience customers with a range of sample management solutions for scientific research and support drug development.

About Lam Research

Lam Research Corporation is a supplier of wafer fabrication equipment and services to the semiconductor industry. The Company designs, manufactures, markets, refurbishes and services semiconductor processing systems that are used in the fabrication of integrated circuits (ICs). It operates through manufacturing and servicing of wafer processing semiconductor manufacturing equipment segment. Its products are designed to enable its customers build a range of devices that are used in a range of electronic products, including cell phones, tablets, computers, storage devices, and networking equipment. Its customer base includes semiconductor memory, foundry, and integrated device manufacturers (IDMs) that make products, such as dynamic random-access memory (DRAM), negative-AND (NAND) memory and logic devices. It offers a portfolio of products that are used in several areas of the semiconductor manufacturing process flow, including thin film deposition, plasma etch and single-wafer clean.

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