Kulicke and Soffa Industries (NASDAQ: KLIC) and MACOM Technology Solutions (NASDAQ:MTSI) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Kulicke and Soffa Industries and MACOM Technology Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kulicke and Soffa Industries 1 0 2 0 2.33
MACOM Technology Solutions 1 3 5 0 2.44

Kulicke and Soffa Industries currently has a consensus target price of $29.17, suggesting a potential upside of 19.88%. MACOM Technology Solutions has a consensus target price of $44.14, suggesting a potential upside of 39.25%. Given MACOM Technology Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe MACOM Technology Solutions is more favorable than Kulicke and Soffa Industries.

Valuation & Earnings

This table compares Kulicke and Soffa Industries and MACOM Technology Solutions’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kulicke and Soffa Industries $809.00 million 2.12 $112.01 million $1.56 15.60
MACOM Technology Solutions $698.77 million 2.92 -$169.49 million ($2.97) -10.67

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

Profitability

This table compares Kulicke and Soffa Industries and MACOM Technology Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kulicke and Soffa Industries 13.85% 14.54% 11.52%
MACOM Technology Solutions -24.26% 15.05% 7.04%

Insider and Institutional Ownership

85.8% of Kulicke and Soffa Industries shares are held by institutional investors. Comparatively, 88.2% of MACOM Technology Solutions shares are held by institutional investors. 1.0% of Kulicke and Soffa Industries shares are held by company insiders. Comparatively, 42.3% of MACOM Technology Solutions shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Kulicke and Soffa Industries has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, MACOM Technology Solutions has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.

Summary

MACOM Technology Solutions beats Kulicke and Soffa Industries on 8 of the 14 factors compared between the two stocks.

Kulicke and Soffa Industries Company Profile

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.

MACOM Technology Solutions Company Profile

MACOM Technology Solutions Holdings, Inc. is a provider of high-performance analog semiconductor solutions that enable Internet applications, the cloud-connected applications economy, and the networked battlefield across the radio frequency (RF), microwave, millimeterwave and photonic spectrum. It has multiple design centers, silicon, gallium arsenide and indium phosphide fabrication, manufacturing, assembly and test, and operational facilities throughout North America, Europe, Asia and Australia. It also offers foundry services. It offered a portfolio of over 4,500 standard and custom devices, which include integrated circuits, multi-chip modules, power pallets and transistors, diodes, amplifiers, switches and switch limiters, passive and active components and complete subsystems, across more than 40 product lines serving three primary markets, as of September 30, 2016. The Company’s products are RF Power Products, Optoelectronics and Photonic Solutions, among others.

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