Head-To-Head Survey: Silicon Motion Technology (NASDAQ:SIMO) & Kulicke and Soffa Industries (NASDAQ:KLIC)

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

Dividends

Kulicke and Soffa Industries pays an annual dividend of $0.80 per share and has a dividend yield of 1.7%. Silicon Motion Technology pays an annual dividend of $1.99 per share and has a dividend yield of 3.8%. Kulicke and Soffa Industries pays out -65.0% of its earnings in the form of a dividend. Silicon Motion Technology pays out 75.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Kulicke and Soffa Industries and Silicon Motion Technology”s top-line 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	3.62	-$69.01 million	($1.23)	-38.54
Silicon Motion Technology	$639.14 million	2.76	$52.87 million	$2.64	19.86

Silicon Motion Technology has lower revenue, but higher earnings than Kulicke and Soffa Industries. Kulicke and Soffa Industries is trading at a lower price-to-earnings ratio than Silicon Motion Technology, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Kulicke and Soffa Industries and Silicon Motion Technology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kulicke and Soffa Industries	0	2	3	0	2.60
Silicon Motion Technology	1	0	8	0	2.78

Kulicke and Soffa Industries currently has a consensus price target of $52.40, suggesting a potential upside of 10.53%. Silicon Motion Technology has a consensus price target of $81.67, suggesting a potential upside of 55.76%. Given Silicon Motion Technology’s stronger consensus rating and higher possible upside, analysts clearly believe Silicon Motion Technology is more favorable than Kulicke and Soffa Industries.

Insider & Institutional Ownership

98.2% of Kulicke and Soffa Industries shares are held by institutional investors. Comparatively, 78.0% of Silicon Motion Technology shares are held by institutional investors. 0.0% of Kulicke and Soffa Industries shares are held by insiders. Comparatively, 5.3% of Silicon Motion Technology shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Kulicke and Soffa Industries has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Silicon Motion Technology has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares Kulicke and Soffa Industries and Silicon Motion Technology’s 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%
Silicon Motion Technology	10.90%	11.52%	8.64%

Summary

Silicon Motion Technology 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 Silicon Motion Technology

Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. The company offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the FerriSSD, Ferri-eMMC, and Ferri-UFS brands. The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, Korea, China, Malaysia, Singapore, and internationally. The company was founded in 1995 and is based in Hong Kong, Hong Kong.