Kulicke and Soffa Industries (NASDAQ:KLIC) versus United Microelectronics (NYSE:UMC) Financial Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kulicke and Soffa Industries	-9.77%	-0.92%	-0.71%
United Microelectronics	20.35%	12.78%	8.16%

Dividends

Kulicke and Soffa Industries pays an annual dividend of $0.82 per share and has a dividend yield of 1.9%. United Microelectronics pays an annual dividend of $0.35 per share and has a dividend yield of 5.8%. Kulicke and Soffa Industries pays out 683.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United Microelectronics pays out 60.3% of its earnings in the form of a dividend. United Microelectronics is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

98.2% of Kulicke and Soffa Industries shares are held by institutional investors. Comparatively, 5.1% of United Microelectronics shares are held by institutional investors. 3.4% of Kulicke and Soffa Industries shares are held by insiders. Comparatively, 8.0% of United Microelectronics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Kulicke and Soffa Industries has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, United Microelectronics has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Earnings & Valuation

This table compares Kulicke and Soffa Industries and United Microelectronics”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kulicke and Soffa Industries	$706.23 million	3.30	-$69.01 million	$0.12	361.58
United Microelectronics	$7.09 billion	2.14	$1.44 billion	$0.58	10.42

United Microelectronics has higher revenue and earnings than Kulicke and Soffa Industries. United Microelectronics 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Kulicke and Soffa Industries and United Microelectronics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kulicke and Soffa Industries	0	2	3	0	2.60
United Microelectronics	1	3	0	0	1.75

Kulicke and Soffa Industries currently has a consensus target price of $52.40, suggesting a potential upside of 20.77%. United Microelectronics has a consensus target price of $7.40, suggesting a potential upside of 22.48%. Given United Microelectronics’ higher probable upside, analysts plainly believe United Microelectronics is more favorable than Kulicke and Soffa Industries.

Summary

United Microelectronics beats Kulicke and Soffa Industries on 11 of the 16 factors compared between the two stocks.

About Kulicke and Soffa Industries

Kulicke and Soffa Industries, Inc. designs, manufactures, and sells capital equipment and tools used to assemble semiconductor devices. It operates through four segments: Ball Bonding Equipment, Wedge Bonding Equipment, Advanced Solutions, and Aftermarket Products and Services (APS). The company offers ball bonding equipment, wafer level bonding equipment, wedge bonding equipment; and advanced display, die-attach, and thermocompression systems and solutions, as well as tools, spares and services for equipment. It also services, maintains, repairs, and upgrades equipment. The company serves semiconductor device manufacturers, integrated device manufacturers, outsourced semiconductor assembly and test providers, other electronics manufacturers, industrial manufacturers, foundry service providers, and automotive electronics suppliers primarily in the United States and the Asia/Pacific region. The company was founded in 1951 and is headquartered in Fort Washington, Pennsylvania.

About United Microelectronics

United Microelectronics Corporation operates as a semiconductor wafer foundry in Taiwan, China, Hong Kong, Japan, Korea, the United States, Europe, and internationally. The company provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. It serves fabless design companies and integrated device manufacturers. United Microelectronics Corporation was incorporated in 1980 and is headquartered in Hsinchu City, Taiwan.