Nova Measuring Instruments (NVMI) and KLA-Tencor (KLAC) Critical Review

Nova Measuring Instruments (NASDAQ: NVMI) and KLA-Tencor (NASDAQ:KLAC) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

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This is a breakdown of recent ratings for Nova Measuring Instruments and KLA-Tencor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nova Measuring Instruments 0 0 4 0 3.00
KLA-Tencor 0 3 11 0 2.79

Nova Measuring Instruments currently has a consensus target price of $33.50, indicating a potential upside of 17.34%. KLA-Tencor has a consensus target price of $124.07, indicating a potential upside of 13.98%. Given Nova Measuring Instruments’ stronger consensus rating and higher probable upside, analysts clearly believe Nova Measuring Instruments is more favorable than KLA-Tencor.


This table compares Nova Measuring Instruments and KLA-Tencor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nova Measuring Instruments 20.93% 25.05% 19.99%
KLA-Tencor 17.28% 85.81% 20.18%

Institutional & Insider Ownership

44.0% of Nova Measuring Instruments shares are held by institutional investors. Comparatively, 91.7% of KLA-Tencor shares are held by institutional investors. 1.0% of Nova Measuring Instruments shares are held by company insiders. Comparatively, 0.2% of KLA-Tencor shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Nova Measuring Instruments and KLA-Tencor’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nova Measuring Instruments $221.99 million 3.59 $46.45 million $1.85 15.43
KLA-Tencor $3.48 billion 4.88 $926.07 million $5.94 18.32

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

Volatility & Risk

Nova Measuring Instruments has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, KLA-Tencor has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.


KLA-Tencor pays an annual dividend of $2.36 per share and has a dividend yield of 2.2%. Nova Measuring Instruments does not pay a dividend. KLA-Tencor pays out 39.7% of its earnings in the form of a dividend.


KLA-Tencor beats Nova Measuring Instruments on 11 of the 16 factors compared between the two stocks.

About Nova Measuring Instruments

Nova Measuring Instruments Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel. The company offers in-line optical and x-ray stand-alone metrology systems, as well as integrated optical metrology systems that attach directly to wafer fabrication process equipment. Its products include thin film and optical CD process control solutions for dimensional, films, and material metrology measurements for process control across various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical polishing, and deposition. The company serves various sectors of the integrated circuit manufacturing industry, including logic, ASIC, foundries, and memory manufactures, as well as end users and process equipment manufacturers worldwide. Nova Measuring Instruments Ltd. was founded in 1993 and is headquartered in Ness Ziona, Israel.

About KLA-Tencor

KLA-Tencor Corporation designs, manufactures, and markets process control and yield management solutions for the semiconductor and related nano-electronics industries worldwide. It offers chip manufacturing products, such as front-end defect inspection tools, defect review systems, advanced packaging process control systems, metrology solutions, in-situ process monitoring products, and lithography software; wafer manufacturing products comprising wafer manufacturing products comprising surface and defect inspection, wafer geometry and nanotopography metrology, and data management; and reticle manufacturing products, such as defect inspection and pattern placement metrology products. The company also provides light emitting diode (LED), power device, and compound semiconductor manufacturing products consisting of patterned wafer inspection, defect inspection, surface metrology, and data management products; thin-film head metrology and inspection, virtual lithography, in-situ process monitoring, transparent and metal substrate inspection, and data management products for data storage media/head manufacturing; and stylus and optical profiling, and optical inspection products for microelectromechanical systems manufacturing, as well as products for general purpose/lab applications. It offers its products and services for bare wafer, IC, lithography reticle, and disk manufacturers. KLA-Tencor Corporation was founded in 1975 and is headquartered in Milpitas, California.

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