Keep an Eye on Applied Materials Stock This Week

What you need to know about Applied Materials stock before Nov 12 earnings report

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Applied Materials, Inc. (NYSE:AMAT) is one of the leading producers of equipment for the production of computer chips, flat panel screens, and solar energy devices. The company is headquartered in Silicon Valley but operates in many locations across the world. Most recently, Applied Materials acquired Kokusai Electronics, which expanded the company’s operations in Japan and Asia.

Applied Materials is slated to report earnings this week on Thursday, November 12 after the close. AMAT is currently only $0.33 away from its 52-week high, and has nearly doubled off its 52-week low of $36.64. Year-to-date, the stock is up 17%.

Applied Materials has beat expectations on three of its four most recent earnings reports. In the fourth quarter of 2019, Applied Materials beat expectations by $0.04. The company reported an earnings per share (EPS) of $0.80. The company increased its EPS to $0.98 in its financial reporting on the first quarter of 2020 and beat expectations by $0.05. The only miss in earnings Applied Materials has reported in the past 12 months came in the second quarter of 2020. The company missed earnings by $0.05, reporting an EPS of $0.89. Most recently, Applied Materials reported an EPS of $1.06 instead of the expected EPS of $0.95, beating its target by 12%. As for the earnings report slated for release on Thursday, Applied Materials is expected to boost its EPS to $1.17.

Applied Materials has a forward dividend of $0.88 and a yield of 1.25% and has grown its dividend since 2005, while its last dividend came in at 22 cents. Applied Materials is currently sporting a ranking of 29 on the Schaeffer's Volatility Scorecard (SVS). Using Schaeffer's robust historical database, we conduct extensive research on each underlying equity and determined which of those underlying equities’ options have historically had underpriced or overpriced options. We rank each equity’s options relative to the others in our universe, with scores ranging from zero to 100. Lower SVS readings point to stocks that have consistently realized lower volatility than their options have priced in -- pointing to possible premium-selling candidates.

Applied Materials is in a prime position to reap the benefits of the ongoing digital era. The company's biggest customers are three of the biggest chipmakers in the world: Samsung Electronics, Taiwan Semiconductor Manufacturing Company (TSM), and Intel (INTC). Furthermore, the company is primarily known as a star in the semiconductor industry, but has three different segments that it operates: Semiconductor Systems, Applied Global Services, and Display. This diversification of revenue sources from a fundamental perspective, makes AMAT stock a good candidate for investors searching for a tech-related stock at an inexpensive price.

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