Daily Stock Pick: Applied Materials Inc

This week, I'm looking for the sixth technology representative of six for my Ivy portfolio.

That technology sector has nineteen industries ranging from communication equipment, computers, consumer electronics, and contract manufacturing, to health, information technology, and services, to the internet, scientific instruments, software, solar, and all such techno-marvels.

Today I'm reviewing a large-cap semiconductor-equipment & materials company named Applied Materials Inc. Their trading ticker symbol is AMAT. I last reported on this firm on August 14, 2018.

Applied Materials is one of the world's largest suppliers of semiconductor manufacturing equipment, providing materials engineering solutions to help make nearly every chip in the world.

The firm's systems are used in every process step with the exception of lithography. Key tools include those for chemical and physical vapor deposition, etching, chemical mechanical polishing, wafer- and reticle-inspection, critical dimension measurement, and defect-inspection scanning electron microscopes.

The company serves manufacturers of semiconductor wafers and chips, liquid crystal and organic light-emitting diode displays, and other electronic devices. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe.

Applied Materials, Inc. was founded in 1967 and is headquartered in Santa Clara, California.

I use three key data points to gauge dividend-paying equities or funds like Applied Materials Inc:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

Those three basic keys, however, best tell whether a company has made, is making, and will make money.

AMAT Price

Applied Materials price per share closed at $46.11 yesterday. A year ago its price was $46.31. Price fell $0.20 or 0.04% in the past year.

Assuming Applied Material's stock trades in the range of $35.00 to $55.00 this year, AMAT's recent $46.11 price could rise by $3.89 and go to $50.00 by mid-July, 2020.

AMAT Dividends

Applied Material's most recent quarterly dividend is $0.21 payable September 12th.

That $0.21 Q payout equates to an annual dividend of $0.84 which produces a yield of 1.82% based on yesterday's $46.11 closing price.

Gains For AMAT?

Adding the $0.84 annual estimated dividend to my $3.89 estimate of Applied Material's price upside shows a $4.73 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we pay a little over $1,000.00 today at the $46.11 recent stock price, we'd buy 22 Applied Materials Inc shares.

A $10 broker fee paid half at purchase and half at sale will cost us $0.45 per share.

Subtract that $0.45 brokerage cost from the estimated $4.73 gross annual gain leaves a net gain of 4.28 X 22 shares = $94.16 or a 9.4% net gain on a $1,014.42 investment.

Therefore, Applied Materials Inc whose trading ticker symbol is AMAT now shows a possible net gain of 9.4% including a 1.82% dividend yield.

Twenty-six brokers track Applied Materials Inc stock:

Twelve says "Buy" AMAT.

Five say AMAT will "Outperform" peers.

Nine say "Hold" AMAT.

Their consensus score of 1.9 equates to "outperform."

Now we can look at Applied Materials Inc and see it has made money, is making money, and could net a 9.4% gain including a 1.64% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to learn if Applied Materials is worth your time and money.