Critical Review: BIO-key International (NASDAQ:BKYI) versus KLA (NASDAQ:KLAC)

KLA (NASDAQ:KLAC) and BIO-key International (NASDAQ:BKYI) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

86.7% of KLA shares are owned by institutional investors. Comparatively, 26.5% of BIO-key International shares are owned by institutional investors. 91.5% of KLA shares are owned by company insiders. Comparatively, 3.7% of BIO-key International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

KLA has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, BIO-key International has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for KLA and BIO-key International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KLA	0	9	19	1	2.72
BIO-key International	1	0	0	0	1.00

KLA presently has a consensus price target of $1,598.96, indicating a potential upside of 7.48%. Given KLA’s stronger consensus rating and higher possible upside, analysts clearly believe KLA is more favorable than BIO-key International.

Profitability

This table compares KLA and BIO-key International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KLA	35.76%	98.18%	29.24%
BIO-key International	-70.23%	-73.33%	-43.89%

Valuation and Earnings

This table compares KLA and BIO-key International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KLA	$12.16 billion	16.04	$4.06 billion	$34.37	43.28
BIO-key International	$6.93 million	0.85	-$4.30 million	($1.04)	-0.52

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

Summary

KLA beats BIO-key International on 15 of the 15 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 BIO-key International

BIO-key International, Inc. develops and markets fingerprint identification biometric technology and software solutions, and enterprise-ready identity access management solutions for commercial, government, and education customers in the United States and internationally. The company offers BIO-key PortalGuard and PortalGuard IDaaS solutions, a customer-controlled and neutral-by-design cloud-based identity platform that allows customers to integrate with any cloud or on-premises SaaS application, as well as windows device authentication through IAM platform. Its solutions enable its customers to secure their workforces and student populations; and make their partner networks more collaborative. In addition, it provides BIO-key VST and WEB-key products; and Civil and Large-Scale ID Infrastructure solutions that develops finger-based biometric technology. Further, it offers finger scanners for enterprise and consumer markets under SideSwipe, EcoID, and SidePass brand names. The company was formerly known as SAC Technologies and changed its name to BIO-key International, Inc. in 2002. BIO-key International, Inc. was founded in 1993 and is headquartered in Wall, New Jersey.