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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Xcerra Corporation and Kulicke and Soffa Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcerra Corporation 0 5 0 0 2.00
Kulicke and Soffa Industries 0 1 1 0 2.50

Xcerra Corporation currently has a consensus price target of $10.25, suggesting a potential upside of 4.06%. Kulicke and Soffa Industries has a consensus price target of $31.00, suggesting a potential upside of 41.29%. Given Kulicke and Soffa Industries’ stronger consensus rating and higher probable upside, analysts plainly believe Kulicke and Soffa Industries is more favorable than Xcerra Corporation.

Institutional & Insider Ownership

86.1% of Xcerra Corporation shares are held by institutional investors. Comparatively, 84.9% of Kulicke and Soffa Industries shares are held by institutional investors. 2.6% of Xcerra Corporation shares are held by company insiders. Comparatively, 1.0% of Kulicke and Soffa Industries shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Xcerra Corporation has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500. Comparatively, Kulicke and Soffa Industries has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Xcerra Corporation 5.77% 9.08% 6.71%
Kulicke and Soffa Industries 11.61% 11.88% 9.53%

Earnings & Valuation

This table compares Xcerra Corporation and Kulicke and Soffa Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xcerra Corporation $390.77 million 1.38 $34.79 million $0.42 23.45
Kulicke and Soffa Industries $738.99 million 2.11 $125.75 million $1.20 18.28

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

Summary

Kulicke and Soffa Industries beats Xcerra Corporation on 10 of the 14 factors compared between the two stocks.

About Xcerra Corporation

Xcerra Corporation is a provider of test and handling capital equipment, interface products, test fixtures and related services to the semiconductor and electronics manufacturing industries. The Company operates through six segments: Semiconductor Test, Semiconductor Handlers, Contactors, PCB Test, Probes/Pins and Fixtures. The Semiconductor Test segment includes operations related to the design, manufacture and sale of automated test equipment for the semiconductor industry that is used to test system-on-a-chip, digital, analog and mixed signal integrated circuits. The Semiconductor Handlers segment includes operations related to the design, manufacture and sale of test handlers used in the testing of integrated circuits. The Contactors segment includes operations related to the design, manufacture and sale of test contactors. The PCB test segment includes operations related to design, manufacture and sale of equipment used in the testing of bare and loaded printed circuit boards.

About Kulicke and Soffa Industries

Kulicke and Soffa Industries, Inc. designs, manufactures and sells capital equipment and expendable tools, as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company supplies a range of bonding equipment. The Company operates through two segments: Equipment and Expendable Tools. The Equipment segment manufactures and sells a line of ball bonders, wedge bonders, advanced packaging and surface mount technology solutions. The Expendable Tools segment manufactures and sells expendable tools for a range of semiconductor packaging applications. It offers capital equipment and expendable tools used to assemble semiconductor devices, including integrated circuits, high and low powered discrete devices, light-emitting diodes and power modules. Its customers primarily consist of semiconductor device manufacturers, outsourced semiconductor assembly and test providers, other electronics manufacturers and automotive electronics suppliers.

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