Kulicke and Soffa Industries (NASDAQ: KLIC) and Axcelis Technologies (NASDAQ:ACLS) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitabiliy, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Kulicke and Soffa Industries and Axcelis Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kulicke and Soffa Industries 12.19% 10.59% 8.60%
Axcelis Technologies 6.48% 9.19% 6.11%

Institutional and Insider Ownership

93.5% of Kulicke and Soffa Industries shares are held by institutional investors. Comparatively, 77.0% of Axcelis Technologies shares are held by institutional investors. 1.0% of Kulicke and Soffa Industries shares are held by insiders. Comparatively, 5.7% of Axcelis Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Kulicke and Soffa Industries and Axcelis Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kulicke and Soffa Industries $711.51 million 2.22 $115.41 million $1.22 18.22
Axcelis Technologies $286.35 million 2.41 $29.36 million $0.59 38.81

Kulicke and Soffa Industries has higher revenue and earnings than Axcelis Technologies. Kulicke and Soffa Industries is trading at a lower price-to-earnings ratio than Axcelis Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Kulicke and Soffa Industries and Axcelis Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kulicke and Soffa Industries 0 1 1 0 2.50
Axcelis Technologies 0 1 3 0 2.75

Kulicke and Soffa Industries currently has a consensus price target of $31.00, suggesting a potential upside of 39.45%. Axcelis Technologies has a consensus price target of $24.80, suggesting a potential upside of 8.30%. Given Kulicke and Soffa Industries’ higher probable upside, equities research analysts clearly believe Kulicke and Soffa Industries is more favorable than Axcelis Technologies.

Volatility & Risk

Kulicke and Soffa Industries has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Axcelis Technologies has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Summary

Kulicke and Soffa Industries beats Axcelis Technologies on 9 of the 14 factors compared between the two stocks.

About Kulicke and Soffa Industries

Kulicke and Soffa Industries, Inc. designs, manufactures and sells capital equipment and expendable tools, as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company supplies a range of bonding equipment. The Company operates through two segments: Equipment and Expendable Tools. The Equipment segment manufactures and sells a line of ball bonders, wedge bonders, advanced packaging and surface mount technology solutions. The Expendable Tools segment manufactures and sells expendable tools for a range of semiconductor packaging applications. It offers capital equipment and expendable tools used to assemble semiconductor devices, including integrated circuits, high and low powered discrete devices, light-emitting diodes and power modules. Its customers primarily consist of semiconductor device manufacturers, outsourced semiconductor assembly and test providers, other electronics manufacturers and automotive electronics suppliers.

About Axcelis Technologies

Axcelis Technologies, Inc. designs, manufactures and services ion implantation and other processing equipment used in the fabrication of semiconductor chips. The Company also provides aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services and customer training. The Company offers a complete line of high energy, high current and medium current implanters for all application requirements. The Company’s Purion XE high energy system combines its radio frequency (RF) Linac high energy, spot beam technology with the Purion platform. The Company also offers the Purion M medium current system. The Company’s Purion M systems also offer differentiation for specialty applications, such as hot silicon carbide. The Company’s Purion H high current system is extendable into ultra-low energy applications to satisfy future process requirements, including leakage current performance.

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