This week, I'm looking for the sixth technology representative of six for my Ivy portfolio. That technology sector has nineteen industries ranging from communication equipment, computers, consumer electronics, and contract manufacturing, to health, information technology and services, to internet, scientific instruments, software, solar, and all such techno-marvels.
Today I'm reviewing a small-cap semiconductor-equipment & materials company named Kulicke & Soffa Industries Inc., which was founded in 1951 and is headquartered in Singapore. Its trading ticker symbol is KLIC.I last reported on this firm August 15, 2018.
Kulicke & Soffa Industries Inc is a company principally engaged in designing, manufacturing, and selling capital equipment and expendable tools that are used for assembling semiconductor devices.
The company operates through two core segments: (1) equipment, which produces and sells a series of ball bonders, wafer-level bonders, wedge bonders, advanced packaging and electronic assembly solutions; and (2) expendable tools, which produces and offers various expendable tools designed for multiple semiconductor packaging applications.
The equipment segment contributes the majority of total revenue. The company serves semiconductor device manufacturers, integrated device manufacturers, outsourced semiconductor assembly and test providers, other electronics manufacturers, industrial manufacturers, and automotive electronics suppliers primarily in the United States and the Asia/Pacific region.
I use three key data points to gauge dividend paying equities or funds like Kulicke & Soffa Industries Inc (KLIC):
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest. Those three basic keys, however, best tell whether a company has made, is making, and will make money.
KLIC Price
Kulicke's price per share closed at $21.87 yesterday. A year ago its price was $28.09. Price fell $6.22 or 22% in the past year.
Assuming Kulicke's stock trades in the range of $18.00 to $27.00 this year, Kulicke's recent $21.87 price could rise by $3.13 and go to 25.00 by mid-July, 2020.
KLIC Dividends
Kulicke's most recent quarterly dividend is $0.12 paid July 15th.
That $0.12 Q payout equates to an annual dividend of $0.48 which produces a yield of 2.19% based on yesterday's $21.87 closing price.
Gains For KLIC?
Adding the $0.48 annual estimated dividend to my $3.13 estimate of Kulicke's price upside shows a $3.61 potential gross annual gain, per share, which will be reduced by costs to trade those shares.
Say we pay a little over $1,000.00 today at the $21.87 recent stock price, we'd buy 46 Kulicke & Soffa Industries Inc (KLIC) shares.
A $10 broker fee paid half at purchase and half at sale will cost us $0.22 per share.
Subtract that $0.22 brokerage cost from the estimated $3.61 gross annual gain leaves a net gain of 3.39 X 46 shares = $155.94 or a 15.56% net gain on a $1,006.02 investment.
Therefore, KLIC now shows a possible net gain of 15.56% including a 2.19% dividend yield.
Four brokers track Kulicke & Soffa Industries Inc stock:
- Two say "Buy" KLIC.
- Two say "Hold" KLIC.
- Their consensus score of 2 equates to "outperform."
Now we can look at Kulicke & Soffa Industries Inc (KLIC) and see it has made money, is making money, and could net a 15.56% gain including a 2.19% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to learn if Kulicke & Soffa is worth your time and money.
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