Analyzing Cohu (COHU) & Teradyne (TER)

Cohu (NASDAQ: COHU) and Teradyne (NYSE:TER) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

87.5% of Cohu shares are owned by institutional investors. Comparatively, 96.4% of Teradyne shares are owned by institutional investors. 3.9% of Cohu shares are owned by insiders. Comparatively, 0.5% of Teradyne shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Cohu and Teradyne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cohu 9.33% 14.10% 9.67%
Teradyne 11.97% 23.45% 15.38%

Dividends

Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Teradyne pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Cohu pays out 17.9% of its earnings in the form of a dividend. Teradyne pays out 15.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Teradyne has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Cohu and Teradyne, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cohu 0 1 3 0 2.75
Teradyne 0 6 8 0 2.57

Cohu currently has a consensus price target of $24.25, indicating a potential downside of 3.85%. Teradyne has a consensus price target of $46.67, indicating a potential upside of 19.20%. Given Teradyne’s higher probable upside, analysts plainly believe Teradyne is more favorable than Cohu.

Volatility & Risk

Cohu has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Teradyne has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Valuation & Earnings

This table compares Cohu and Teradyne’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cohu $352.70 million 2.06 $32.84 million $1.34 18.82
Teradyne $2.14 billion 3.58 $257.69 million $2.34 16.73

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

Summary

Teradyne beats Cohu on 13 of the 17 factors compared between the two stocks.

Cohu Company Profile

Cohu, Inc., through its subsidiaries, engages in the development, manufacture, sale, and servicing of semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors, and thermal sub-systems for semiconductor manufacturers and test subcontractors worldwide. It offers pick-and-place handlers; thermal handler for microprocessors, graphics processors, and other integrated circuits; pick-and-place platform for fabless and outsourced semiconductor assembly and test customers, as well as for integrated device manufacturers; a platform for assembly automation; gravity-feed and test-in-strip handlers; and turret handler for testing and inspection of integrated circuits, LEDs, and discrete devices. The company also provides MEMS test modules that generate physical stimuli for testing of sensor integrated circuits; thermal sub-systems that offer temperature control of the integrated circuit during the testing process; contactor solutions; spares; and a range of device dedication kits that enable handlers to process various semiconductor packages. Cohu, Inc. markets its products through direct sales force and independent sales representatives. The company was formerly known as Cohu Electronics, Inc. and changed its name to Cohu, Inc. in 1972. Cohu, Inc. was founded in 1947 and is headquartered in Poway, California.

Teradyne Company Profile

Teradyne, Inc. designs, develops, manufactures, sells, and supports automatic test equipment worldwide. Its Semiconductor Test segment offers semiconductor test products and services for wafer level and device package testing in automotive, industrial, communications, consumer, computer and electronic game, and other applications. This segment offers FLEX test platform systems; J750 test system to address the highest volume semiconductor devices; Magnum platform that tests memory devices, such as flash memory and DRAM; and ETS platform for use by semiconductor manufacturers, and assembly and test subcontractors in the analog/mixed signal markets. This segment serves integrated device manufacturers that integrate the fabrication of silicon wafers into their business; fabless companies that outsource the manufacturing of silicon wafers; foundries; and outsourced semiconductor assembly and test providers. The company's System Test segment offers defense/aerospace test instrumentation and systems; storage test systems; and circuit-board test and inspection systems. Its Industrial Automation segment provides collaborative robots for manufacturing and light industrial customers. The company's Wireless Test segment provides test solutions for use in the development and manufacture of wireless devices, smart phones, tablets, notebooks, laptops, peripherals, and Internet-of-Things (IoT) devices under the LitePoint brand name. This segment offers IQxel products for Wi-Fi and other standards; IQxstream solution for testing GSM, EDGE, CDMA2000, TD-SCDMA, WCDMA, HSPA+, LTE-FDD, TD_LTE, and LTE-A technologies; modular wireless test instruments for design verification test and production testing of wireless components; lab-in-a-box zSeries solution for design verification of RF power amplifier and smart device RF front end modules; and test software for wireless chipsets. The company was founded in 1960 and is headquartered in North Reading, Massachusetts.

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