Financial Review: KLA (NASDAQ:KLAC) versus Trans-Lux (OTCMKTS:TNLX)

KLA (NASDAQ:KLAC) and Trans-Lux (OTCMKTS:TNLX) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Insider and Institutional Ownership

86.7% of KLA shares are held by institutional investors. Comparatively, 11.9% of Trans-Lux shares are held by institutional investors. 91.5% of KLA shares are held by company insiders. Comparatively, 58.7% of Trans-Lux shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares KLA and Trans-Lux”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KLA	$12.16 billion	12.49	$4.06 billion	$30.39	37.94
Trans-Lux	$15.55 million	N/A	-$4.07 million	($0.33)	-0.76

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

Volatility and Risk

KLA has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, Trans-Lux has a beta of -0.57, indicating that its share price is 157% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for KLA and Trans-Lux, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KLA	0	12	10	0	2.45
Trans-Lux	0	0	0	0	0.00

KLA presently has a consensus price target of $1,040.65, indicating a potential downside of 9.74%. Given KLA’s stronger consensus rating and higher probable upside, equities research analysts clearly believe KLA is more favorable than Trans-Lux.

Profitability

This table compares KLA and Trans-Lux’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KLA	33.41%	112.41%	28.75%
Trans-Lux	N/A	N/A	N/A

Summary

KLA beats Trans-Lux on 13 of the 13 factors compared between the two stocks.

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.

About Trans-Lux

Trans-Lux Corporation engages in the design and manufacture of digital display solutions and fixed digit scoreboards. It operates in two segments, Digital Product Sales; and Digital Product Lease and Maintenance. The Digital Product Sales segment sells indoor and outdoor digital product signage products. The Digital Product Lease and Maintenance segment is involved in the lease and maintenance of indoor and outdoor digital product signage. The company offers LED display systems for use by sports arenas and stadiums; financial institutions, including brokerage firms, banks, energy companies, insurance companies, and mutual fund companies; educational institutions; outdoor advertising companies; corporate and government communication centers; retail outlets; casinos, racetracks and other gaming establishments; airports, train stations, bus terminals, and other transportation facilities; movie theatres; and health maintenance organizations, as well as in various other applications. It also provides TLVision, which consists of full-color video products for use in posting alphanumeric data and displaying of full HD video; and turnkey installation and support services. The company markets its products through direct sales representatives, and a network of independent dealers and distributors in the United States and Canada; and internal salespeople and independent distributors in the rest of North America, Europe, the Middle East, South America, Africa, the Far East, and Australia. Trans-Lux Corporation was incorporated in 1920 and is headquartered in New York, New York. Trans-Lux Corporation operates as a subsidiary of Unilumin North America Inc.