KLA (NASDAQ:KLAC) versus JinkoSolar (NYSE:JKS) Critical Analysis

JinkoSolar (NYSE:JKS) and KLA (NASDAQ:KLAC) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

35.8% of JinkoSolar shares are held by institutional investors. Comparatively, 86.7% of KLA shares are held by institutional investors. 19.8% of JinkoSolar shares are held by company insiders. Comparatively, 91.5% of KLA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares JinkoSolar and KLA”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JinkoSolar	$58.27 billion	0.01	-$635.64 million	($9.33)	-1.34
KLA	$13.58 billion	16.57	$4.83 billion	$3.67	46.94

KLA has lower revenue, but higher earnings than JinkoSolar. JinkoSolar is trading at a lower price-to-earnings ratio than KLA, indicating that it is currently the more affordable of the two stocks.

Dividends

JinkoSolar pays an annual dividend of $1.48 per share and has a dividend yield of 11.9%. KLA pays an annual dividend of $0.92 per share and has a dividend yield of 0.5%. JinkoSolar pays out -15.9% of its earnings in the form of a dividend. KLA pays out 25.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. KLA has raised its dividend for 16 consecutive years. JinkoSolar is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

JinkoSolar has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, KLA has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for JinkoSolar and KLA, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JinkoSolar	2	4	1	1	2.12
KLA	0	9	19	1	2.72

JinkoSolar presently has a consensus target price of $19.88, indicating a potential upside of 59.18%. KLA has a consensus target price of $222.22, indicating a potential upside of 29.00%. Given JinkoSolar’s higher probable upside, research analysts plainly believe JinkoSolar is more favorable than KLA.

Profitability

This table compares JinkoSolar and KLA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JinkoSolar	-5.85%	-9.93%	-2.21%
KLA	35.57%	87.66%	29.23%

Summary

KLA beats JinkoSolar on 13 of the 17 factors compared between the two stocks.

About JinkoSolar

JinkoSolar Holding Co., Ltd., together with its subsidiaries, engages in the design, development, production, and marketing of photovoltaic products. The company offers solar modules, silicon wafers, solar cells, recovered silicon materials, and silicon ingots. It also provides solar system integration services; solar power generation and solar system EPC services; and energy storage system, as well as undertakes solar power projects. The company sells its products to distributors, project developers, system integrators, and manufacturers of solar power products under the JinkoSolar brand. As of December 31, 2023, it had an integrated annual capacity of 85 gigawatts (GW) for mono wafers; 90 GW for solar cells; and 110 GW for solar modules. It operates in China, the United States, Mexico, Australia, Japan, the United Arab Emirates, Turkey, Jordan, Vietnam, Egypt, Spain, Germany, and internationally. JinkoSolar Holding Co., Ltd. was founded in 2006 and is headquartered in Shangrao, the People's Republic of China.

About KLA

KLA Corporation, together with its subsidiaries, engages in the design, manufacture, and marketing of process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide. It operates through three segments: Semiconductor Process Control; Specialty Semiconductor Process; and PCB and Component Inspection. The company offers inspection and review tools to identify, locate, characterize, review, and analyze defects on various surfaces of patterned and unpatterned wafers; metrology systems that are used to measure pattern dimensions, film thickness, film stress, layer-to-layer alignment, pattern placement, surface topography, and electro-optical properties for wafers; chemical process control equipment; wired and wireless sensor wafers and reticles; wafer defect inspection, review, and metrology systems; reticle inspection and metrology systems; and semiconductor software solutions that provide run-time process control, defect excursion identification, process corrections, and defect classification to accelerate yield learning rates and reduce production risk. It also provides etch, plasma dicing, deposition, and other wafer processing technologies and solutions for the semiconductor and microelectronics industry. In addition, the company offers direct imaging, inspection, optical shaping, inkjet and additive printing, UV laser drilling, and computer-aided manufacturing and engineering solutions for the PCB market; inspection and electrical testing systems to identify and classify defects, as well as systems to repair defects for the display market; and inspection and metrology systems for quality control and yield improvement in advanced and traditional semiconductor packaging markets. The company was formerly known as KLA-Tencor Corporation and changed its name to KLA Corporation in July 2019. KLA Corporation was incorporated in 1975 and is headquartered in Milpitas, California.