Financial Review: Kulicke and Soffa Industries (NASDAQ:KLIC) vs. Advantest (OTCMKTS:ATEYY)

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Kulicke and Soffa Industries and Advantest, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kulicke and Soffa Industries 0 0 4 0 3.00
Advantest 0 2 0 0 2.00

Kulicke and Soffa Industries currently has a consensus price target of $68.75, indicating a potential downside of 3.87%. Given Kulicke and Soffa Industries’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Kulicke and Soffa Industries is more favorable than Advantest.

Insider & Institutional Ownership

90.6% of Kulicke and Soffa Industries shares are owned by institutional investors. Comparatively, 0.0% of Advantest shares are owned by institutional investors. 2.2% of Kulicke and Soffa Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Kulicke and Soffa Industries and Advantest’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kulicke and Soffa Industries $623.18 million 7.11 $52.30 million $0.95 75.28
Advantest $2.95 billion 6.82 $656.00 million $3.32 30.80

Advantest has higher revenue and earnings than Kulicke and Soffa Industries. Advantest 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.

Dividends

Kulicke and Soffa Industries pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Advantest pays an annual dividend of $1.18 per share and has a dividend yield of 1.2%. Kulicke and Soffa Industries pays out 58.9% of its earnings in the form of a dividend. Advantest pays out 35.5% 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. Kulicke and Soffa Industries has raised its dividend for 1 consecutive years. Advantest is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Kulicke and Soffa Industries has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Advantest has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Kulicke and Soffa Industries 20.60% 31.70% 22.18%
Advantest 22.90% 30.96% 20.37%

Summary

Kulicke and Soffa Industries beats Advantest on 10 of the 17 factors compared between the two stocks.

Kulicke and Soffa Industries Company Profile

Kulicke & Soffa Industries, Inc. engages in the design, manufacture, and sale of tools used to assemble semiconductor devices. It operates through the Capital Equipment and APS segments. The Capital Equipment segment consists of ball bonders, wedge bonders, advanced packaging, and electronic assembly solutions. The APS segment offers a variety of expandable tools for a broad range of semiconductor packaging applications. The company was founded by Frederick W. Kulicke and Albert Soffa in 1951 and is headquartered in Singapore.

Advantest Company Profile

Advantest Corp. engages in the manufacture and sale of mechatronic products. It operates through the following segments: Semiconductor and Component Test Systems, Mechatronic and Others. The Semiconductor and Component Test Systems segment offers test systems for semiconductors and electronic component industries. The Mechatronic segment provides the semiconductor devices handling mechatronic applied products such as testers, handlers, device interfaces, and nanotechnology products. The Others segment involves in the customer solutions support, and equipment leasing services. The company was founded by Ikuo Takeda in December 1954 and is headquartered in Tokyo, Japan.

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