5-Star Stocks Poised to Pop: Applied Materials

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip equipment maker Applied Materials (NAS: AMAT) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Applied Materials' business and see what CAPS investors are saying about the stock right now.

Applied Materials facts

Headquarters (Founded)

Santa Clara, Calif. (1967)

Market Cap

$13.65 billion

Industry

Semiconductor equipment

Trailing-12-Month Revenue

$11.22 billion

Management

Chairman/CEO Michael Splinter

CFO George Davis

Return on Equity (Average, Past 3 Years)

10%

Cash/Debt

$5.76 billion / $1.95 billion

Dividend Yield

2.9%

Competitors

KLA-Tencor (NAS: KLAC)

Lam Research (NAS: LRCX)

Varian Semiconductor Equipment (NAS: VSEA)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 95% of the 2,041 members who have rated Applied Materials believe the stock will outperform the S&P 500 going forward. These bulls include BKITU and afewgoodstocks11.

Earlier this summer, BKITU listed several of Applied Materials' positives: "Solid financials, outperforms its peers, stock is cheap, pays a nice dividend, works in a field that isn't going anywhere for the next five years."

In fact, Applied Materials currently sports a cheapish PEG ratio of 0.9. That represents a slight discount to competitors KLA-Tencor (1.0), Lam Research (1.5), and Varian Semiconductor (1.0).

CAPS member afewgoodstocks11 elaborates on the Applied Materials bull case:

Tech company with growing dividend that has tracked the S/P for 5 years and is currently at about 25% discount.

P/E (ttm): 7.88
EPS (ttm): 1.45
Div & Yield: 0.32 (2.80%)

Dividend has been paid quarterly since 2005 and risen from .03 cents to .08. Anticipated growing dividend could pay for this investment in 10-14 years (with luck) and the new tech they are releasing could potentially appreciate this stock dramatically.

If you've been waiting for a chance to accumulate, now could be the time.

What do you think about Applied Materials, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackApplied Materials?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Applied Materials. Try any of our Foolish newsletter services free for 30 daysWe Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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