Teradyne (NYSE:TER) versus KLA-Tencor Corporation (KLAC) Head-To-Head Analysis

KLA-Tencor Corporation (NASDAQ: KLAC) and Teradyne (NYSE:TER) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Profitability

This table compares KLA-Tencor Corporation and Teradyne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KLA-Tencor Corporation 26.61% 88.61% 17.85%
Teradyne 20.08% 21.25% 14.64%

Institutional & Insider Ownership

92.0% of KLA-Tencor Corporation shares are held by institutional investors. Comparatively, 93.7% of Teradyne shares are held by institutional investors. 0.3% of KLA-Tencor Corporation shares are held by insiders. Comparatively, 0.6% of Teradyne shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
KLA-Tencor Corporation $3.48 billion 4.07 $1.33 billion $5.88 15.36
Teradyne $1.94 billion 3.43 $547.01 million $1.93 17.35

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

Dividends

KLA-Tencor Corporation pays an annual dividend of $2.16 per share and has a dividend yield of 2.4%. Teradyne pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. KLA-Tencor Corporation pays out 36.7% of its earnings in the form of a dividend. Teradyne pays out 14.5% 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. KLA-Tencor Corporation has raised its dividend for 2 consecutive years. KLA-Tencor Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for KLA-Tencor Corporation and Teradyne, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KLA-Tencor Corporation 2 3 7 1 2.54
Teradyne 0 2 9 0 2.82

KLA-Tencor Corporation currently has a consensus price target of $98.90, indicating a potential upside of 9.48%. Teradyne has a consensus price target of $35.75, indicating a potential upside of 6.78%. Given KLA-Tencor Corporation’s higher possible upside, research analysts clearly believe KLA-Tencor Corporation is more favorable than Teradyne.

Volatility & Risk

KLA-Tencor Corporation has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, Teradyne has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Summary

KLA-Tencor Corporation beats Teradyne on 12 of the 18 factors compared between the two stocks.

KLA-Tencor Corporation Company Profile

KLA-Tencor Corporation (KLA-Tencor) is a supplier of process control and yield management solutions for the semiconductor and related nanoelectronics industries. The Company’s products are also used in a number of other high technology industries, including the light emitting diode (LED) and data storage industries, as well as general materials research. Its products and services are used by bare wafer, integrated circuit (IC), lithography reticle (reticle or mask) and disk manufacturers around the world. The Company’s inspection and metrology products and related offerings are categorized in various groups, including Chip Manufacturing, Wafer Manufacturing, Reticle Manufacturing, LED, Power Device and Compound Semiconductor Manufacturing, Data Storage Media/Head Manufacturing, Microelectromechanical Systems (MEMS) Manufacturing, and General Purpose/Lab Applications. It also provides refurbished KLA-Tencor tools as service and support for its products.

Teradyne Company Profile

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.

Receive News & Ratings for KLA-Tencor Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for KLA-Tencor Corporation and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply