Critical Contrast: Hayward (NYSE:HAYW) vs. KLA (NASDAQ:KLAC)

KLA (NASDAQ:KLAC) and Hayward (NYSE:HAYW) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for KLA and Hayward, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KLA	0	10	20	0	2.67
Hayward	0	3	2	0	2.40

KLA presently has a consensus price target of $1,842.19, suggesting a potential downside of 9.93%. Hayward has a consensus price target of $17.50, suggesting a potential upside of 25.04%. Given Hayward’s higher possible upside, analysts plainly believe Hayward is more favorable than KLA.

Institutional & Insider Ownership

86.7% of KLA shares are owned by institutional investors. 91.5% of KLA shares are owned by company insiders. Comparatively, 4.7% of Hayward 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 and Risk

KLA has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500. Comparatively, Hayward has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KLA	35.66%	91.89%	29.21%
Hayward	13.98%	11.45%	5.77%

Earnings & Valuation

This table compares KLA and Hayward”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KLA	$13.10 billion	20.40	$4.06 billion	$35.33	57.89
Hayward	$1.12 billion	2.71	$151.57 million	$0.73	19.17

KLA has higher revenue and earnings than Hayward. Hayward 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 Hayward on 13 of the 14 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 Hayward

Hayward Holdings, Inc. designs, manufactures, and markets a portfolio of pool equipment and associated automation systems in North America, Europe, and internationally. The company offers pool equipment, including pumps, filters, robotics, suction and pressure cleaners, gas heaters and heat pumps, water features and landscape lighting, water sanitizers, salt chlorine generators, safety equipment, and in-floor automated cleaning systems, as well as LED illumination solutions. It sells its products through specialty distributors, retailers, and buying groups. The company was founded in 1925 and is headquartered in Charlotte, North Carolina.