Kulicke and Soffa Industries (NASDAQ: KLIC) and MACOM Technology Solutions Holdings (NASDAQ:MTSI) are both semiconductor equipment & testing – nec companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Kulicke and Soffa Industries $809.00 million 2.36 $47.11 million $1.55 17.29
MACOM Technology Solutions Holdings $698.77 million 3.02 $1.43 million ($2.47) -13.30

Kulicke and Soffa Industries has higher revenue and earnings than MACOM Technology Solutions Holdings. MACOM Technology Solutions Holdings 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.

Institutional and Insider Ownership

84.1% of Kulicke and Soffa Industries shares are owned by institutional investors. Comparatively, 87.9% of MACOM Technology Solutions Holdings shares are owned by institutional investors. 1.0% of Kulicke and Soffa Industries shares are owned by company insiders. Comparatively, 42.3% of MACOM Technology Solutions Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Kulicke and Soffa Industries and MACOM Technology Solutions Holdings, as provided by MarketBeat.com.

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

Kulicke and Soffa Industries currently has a consensus target price of $28.17, suggesting a potential upside of 5.10%. MACOM Technology Solutions Holdings has a consensus target price of $44.14, suggesting a potential upside of 34.38%. Given MACOM Technology Solutions Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe MACOM Technology Solutions Holdings is more favorable than Kulicke and Soffa Industries.

Risk & Volatility

Kulicke and Soffa Industries has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, MACOM Technology Solutions Holdings has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Kulicke and Soffa Industries 13.85% 14.78% 11.78%
MACOM Technology Solutions Holdings -24.26% 15.58% 7.26%

Summary

MACOM Technology Solutions Holdings beats Kulicke and Soffa Industries 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 MACOM Technology Solutions Holdings

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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