Financial Contrast: KLA (KLAC) versus The Competition

KLA (NASDAQ:KLAC) is one of 220 publicly-traded companies in the “Semiconductors & Semiconductor Equipment” industry, but how does it compare to its competitors? We will compare KLA to similar businesses based on the strength of its analyst recommendations, dividends, risk, institutional ownership, earnings, profitability and valuation.

Analyst Recommendations

This is a breakdown of current ratings for KLA and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KLA	0	9	19	1	2.72
KLA Competitors	3513	12389	25838	1004	2.57

KLA currently has a consensus price target of $220.35, indicating a potential upside of 38.66%. As a group, “Semiconductors & Semiconductor Equipment” companies have a potential upside of 36.82%. Given KLA’s stronger consensus rating and higher possible upside, analysts clearly believe KLA is more favorable than its competitors.

Valuation and Earnings

This table compares KLA and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
KLA	$14.51 billion	$4.83 billion	39.73
KLA Competitors	$1,259.17 billion	$2.53 billion	8.58

KLA’s competitors have higher revenue, but lower earnings than KLA. KLA is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

86.7% of KLA shares are held by institutional investors. Comparatively, 54.7% of shares of all “Semiconductors & Semiconductor Equipment” companies are held by institutional investors. 79.4% of KLA shares are held by company insiders. Comparatively, 11.8% of shares of all “Semiconductors & Semiconductor Equipment” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

KLA pays an annual dividend of $0.92 per share and has a dividend yield of 0.6%. KLA pays out 23.0% of its earnings in the form of a dividend. As a group, “Semiconductors & Semiconductor Equipment” companies pay a dividend yield of 0.9% and pay out 29.5% of their earnings in the form of a dividend. KLA has raised its dividend for 16 consecutive years.

Profitability

This table compares KLA and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KLA	36.25%	89.30%	30.85%
KLA Competitors	-1,255.44%	-126.13%	-3.87%

Volatility & Risk

KLA has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500. Comparatively, KLA’s competitors have a beta of 2.81, indicating that their average share price is 181% more volatile than the S&P 500.

Summary

KLA beats its competitors on 12 of the 15 factors compared.

About KLA

KLA Corporation develops process-control and yield-management technologies used in the manufacture of semiconductors and other electronic products. Its systems help manufacturers detect defects, measure features and monitor production processes as they make increasingly complex devices. The company’s products include inspection and metrology equipment, as well as software and related services. Its technologies support multiple stages of semiconductor production, from work on wafers and reticles to advanced packaging.