Comparing Teradyne (TER) and Its Peers

Teradyne (NYSE: TER) is one of 13 public companies in the “Instruments to measure electricity” industry, but how does it contrast to its competitors? We will compare Teradyne to similar companies based on the strength of its dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Volatility and Risk

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Teradyne has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Teradyne’s competitors have a beta of 0.88, indicating that their average share price is 12% less volatile than the S&P 500.

Dividends

Teradyne pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. Teradyne pays out 15.4% of its earnings in the form of a dividend. As a group, “Instruments to measure electricity” companies pay a dividend yield of 0.6% and pay out 16.6% of their earnings in the form of a dividend. Teradyne has increased its dividend for 3 consecutive years. Teradyne is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Teradyne and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Teradyne $2.14 billion $257.69 million 18.24
Teradyne Competitors $511.95 million $25.25 million 22.56

Teradyne has higher revenue and earnings than its competitors. Teradyne is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

98.6% of Teradyne shares are held by institutional investors. Comparatively, 52.6% of shares of all “Instruments to measure electricity” companies are held by institutional investors. 0.6% of Teradyne shares are held by company insiders. Comparatively, 12.6% of shares of all “Instruments to measure electricity” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Teradyne and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teradyne 0 3 10 0 2.77
Teradyne Competitors 51 251 403 17 2.53

Teradyne currently has a consensus price target of $48.45, indicating a potential upside of 13.53%. As a group, “Instruments to measure electricity” companies have a potential upside of 6.77%. Given Teradyne’s stronger consensus rating and higher possible upside, equities analysts plainly believe Teradyne is more favorable than its competitors.

Profitability

This table compares Teradyne and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Teradyne 12.06% 23.37% 15.55%
Teradyne Competitors 0.82% 11.02% 6.88%

Summary

Teradyne beats its competitors on 12 of the 15 factors compared.

About Teradyne

Teradyne, Inc. supplies automation equipment for test and industrial applications. The Company designs, develops, manufactures and sells automatic test systems used to test semiconductors, wireless products, data storage and complex electronics systems in the consumer electronics, wireless, automotive, industrial, communications, and aerospace and defense industries. Its segments include Semiconductor Test, which includes operations related to the design, manufacturing and marketing of semiconductor test products and services; System Test, which includes operations related to the design, manufacturing and marketing of products and services for defense/aerospace instrumentation test, storage test and circuit-board test; Wireless Test, which includes operations related to the design, manufacturing and marketing of wireless test products and services, and Industrial Automation, which includes operations related to the design, manufacturing and marketing of collaborative robots.

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