Reviewing United Microelectronics (NYSE:UMC) and Kulicke and Soffa Industries (NASDAQ:KLIC)

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

Volatility & Risk

United Microelectronics has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Kulicke and Soffa Industries has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Insider & Institutional Ownership

5.1% of United Microelectronics shares are owned by institutional investors. Comparatively, 98.2% of Kulicke and Soffa Industries shares are owned by institutional investors. 8.0% of United Microelectronics shares are owned by company insiders. Comparatively, 0.0% of Kulicke and Soffa Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

United Microelectronics pays an annual dividend of $0.35 per share and has a dividend yield of 6.0%. Kulicke and Soffa Industries pays an annual dividend of $0.82 per share and has a dividend yield of 1.8%. United Microelectronics pays out 60.3% of its earnings in the form of a dividend. Kulicke and Soffa Industries pays out -66.7% 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.

Analyst Recommendations

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

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

United Microelectronics currently has a consensus price target of $7.40, indicating a potential upside of 27.04%. Kulicke and Soffa Industries has a consensus price target of $52.40, indicating a potential upside of 18.20%. Given United Microelectronics’ higher probable upside, research analysts plainly believe United Microelectronics is more favorable than Kulicke and Soffa Industries.

Profitability

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

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

Valuation and Earnings

This table compares United Microelectronics and Kulicke and Soffa Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Microelectronics	$226.87 billion	0.06	$1.95 billion	$0.58	10.04
Kulicke and Soffa Industries	$706.23 million	3.38	-$69.01 million	($1.23)	-36.04

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

Summary

United Microelectronics beats Kulicke and Soffa Industries on 10 of the 16 factors compared between the two stocks.

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.

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.