Kulicke and Soffa Industries (NASDAQ: KLIC) and Photronics (NASDAQ:PLAB) are both small-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.
This table compares Kulicke and Soffa Industries and Photronics’ 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%|
85.0% of Kulicke and Soffa Industries shares are owned by institutional investors. Comparatively, 94.5% of Photronics shares are owned by institutional investors. 1.0% of Kulicke and Soffa Industries shares are owned by company insiders. Comparatively, 3.7% of Photronics shares are owned by company 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.
This is a breakdown of current ratings for Kulicke and Soffa Industries and Photronics, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kulicke and Soffa Industries||1||0||2||0||2.33|
Kulicke and Soffa Industries currently has a consensus target price of $29.17, indicating a potential upside of 13.49%. Photronics has a consensus target price of $13.00, indicating a potential upside of 47.73%. Given Photronics’ stronger consensus rating and higher probable upside, analysts plainly believe Photronics is more favorable than Kulicke and Soffa Industries.
Volatility and Risk
Kulicke and Soffa Industries has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, Photronics has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.
Earnings & Valuation
This table compares Kulicke and Soffa Industries and Photronics’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kulicke and Soffa Industries||$809.00 million||2.24||$112.01 million||$1.55||16.58|
|Photronics||$450.68 million||1.35||$13.13 million||$0.19||46.32|
Kulicke and Soffa Industries has higher revenue and earnings than Photronics. Kulicke and Soffa Industries is trading at a lower price-to-earnings ratio than Photronics, indicating that it is currently the more affordable of the two stocks.
Kulicke and Soffa Industries beats Photronics 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.
Photronics, Inc. is a manufacturer of photomasks, which are photographic quartz plates containing microscopic images of electronic circuits. As of October 30, 2016, the Company operated principally from nine manufacturing facilities: two located in Europe, three in Taiwan, one in Korea and three in the United States. Photomasks are used in the manufacture of semiconductors and flat panel displays (FPDs), and are used as masters to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits (ICs), and a range of FPDs and other types of electrical and optical components. The Company offers reticle and photomask maintenance, including pellicle replacement, mask cleaning and re-certification, at all its sites across the world. Its products include Mature Binary, Advanced Binary Reticles, Phase Shift Masks-Embedded Attenuated Phase Shift Masks (EAPSM), Other Advanced Products and Large Area Masks.
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