Is Applied Materials (AMAT) Stock Outpacing Its Computer and Technology Peers This Year?

For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Applied Materials (AMAT) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.

Applied Materials is one of 596 individual stocks in the Computer and Technology sector. Collectively, these companies sit at #2 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.

The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. Applied Materials is currently sporting a Zacks Rank of #2 (Buy).

The Zacks Consensus Estimate for AMAT's full-year earnings has moved 15.8% higher within the past quarter. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

According to our latest data, AMAT has moved about 52.3% on a year-to-date basis. In comparison, Computer and Technology companies have returned an average of 10.6%. This shows that Applied Materials is outperforming its peers so far this year.

Another Computer and Technology stock, which has outperformed the sector so far this year, is Ametek (AME). The stock has returned 12.2% year-to-date.

In Ametek's case, the consensus EPS estimate for the current year increased 0.8% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

To break things down more, Applied Materials belongs to the Electronics - Semiconductors industry, a group that includes 47 individual companies and currently sits at #59 in the Zacks Industry Rank. On average, this group has gained an average of 32.6% so far this year, meaning that AMAT is performing better in terms of year-to-date returns.

In contrast, Ametek falls under the Electronics - Testing Equipment industry. Currently, this industry has 4 stocks and is ranked #92. Since the beginning of the year, the industry has moved +14.6%.

Going forward, investors interested in Computer and Technology stocks should continue to pay close attention to Applied Materials and Ametek as they could maintain their solid performance.

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This article originally published on Zacks Investment Research (zacks.com).

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