Reviewing KLA (NASDAQ:KLAC) and Research Frontiers (NASDAQ:REFR)

Research Frontiers (NASDAQ:REFR) and KLA (NASDAQ:KLAC) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Institutional & Insider Ownership

11.9% of Research Frontiers shares are owned by institutional investors. Comparatively, 86.7% of KLA shares are owned by institutional investors. 6.5% of Research Frontiers shares are owned by insiders. Comparatively, 91.5% of KLA shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Research Frontiers and KLA”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Research Frontiers	$1.34 million	39.93	-$1.31 million	($0.05)	-31.80
KLA	$12.16 billion	11.68	$4.06 billion	$30.39	35.49

KLA has higher revenue and earnings than Research Frontiers. Research Frontiers is trading at a lower price-to-earnings ratio than KLA, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Research Frontiers and KLA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Research Frontiers	0	0	0	0	0.00
KLA	0	11	7	0	2.39

KLA has a consensus price target of $916.76, suggesting a potential downside of 15.00%. Given KLA’s stronger consensus rating and higher probable upside, analysts plainly believe KLA is more favorable than Research Frontiers.

Volatility and Risk

Research Frontiers has a beta of 0.23, meaning that its stock price is 77% less volatile than the S&P 500. Comparatively, KLA has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Profitability

This table compares Research Frontiers and KLA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Research Frontiers	-143.78%	-72.81%	-50.27%
KLA	33.41%	112.41%	28.75%

Summary

KLA beats Research Frontiers on 13 of the 14 factors compared between the two stocks.

About Research Frontiers

Research Frontiers Incorporated engages in the development and marketing of technology and devices to control the flow of light worldwide. It develops and licenses suspended particle device (SPD-Smart) light-control technology to companies that manufacture and market the SPD-Smart chemical emulsion, light-control film made from the chemical emulsion, the light-control panels made by laminating the film, and electronics to power end-products incorporating the film, as well as lamination services for and the end-products, such as windows, skylights, and sunroofs. The company's SPD-Smart light-control technology is used in various product applications, including windows, sunshades, skylights, and interior partitions for homes and buildings; automotive windows, sunroofs, sun-visors, sunshades, rear-view mirrors, instrument panels, and navigation systems; aircraft windows; museum display panels, and eyewear products; and flat panel displays for electronic products. It serves architectural, automotive, marine, and aerospace and appliance applications. The company was incorporated in 1965 and is headquartered in Woodbury, New York.

About KLA

KLA Corporation, together with its subsidiaries, engages in the design, manufacture, and marketing of process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide. It operates through three segments: Semiconductor Process Control; Specialty Semiconductor Process; and PCB and Component Inspection. The company offers inspection and review tools to identify, locate, characterize, review, and analyze defects on various surfaces of patterned and unpatterned wafers; metrology systems that are used to measure pattern dimensions, film thickness, film stress, layer-to-layer alignment, pattern placement, surface topography, and electro-optical properties for wafers; chemical process control equipment; wired and wireless sensor wafers and reticles; wafer defect inspection, review, and metrology systems; reticle inspection and metrology systems; and semiconductor software solutions that provide run-time process control, defect excursion identification, process corrections, and defect classification to accelerate yield learning rates and reduce production risk. It also provides etch, plasma dicing, deposition, and other wafer processing technologies and solutions for the semiconductor and microelectronics industry. In addition, the company offers direct imaging, inspection, optical shaping, inkjet and additive printing, UV laser drilling, and computer-aided manufacturing and engineering solutions for the PCB market; inspection and electrical testing systems to identify and classify defects, as well as systems to repair defects for the display market; and inspection and metrology systems for quality control and yield improvement in advanced and traditional semiconductor packaging markets. The company was formerly known as KLA-Tencor Corporation and changed its name to KLA Corporation in July 2019. KLA Corporation was incorporated in 1975 and is headquartered in Milpitas, California.