Transcat (NASDAQ: TRNS) and Teradyne (NYSE:TER) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.
Institutional and Insider Ownership
55.2% of Transcat shares are owned by institutional investors. Comparatively, 98.6% of Teradyne shares are owned by institutional investors. 8.8% of Transcat shares are owned by insiders. Comparatively, 0.6% of Teradyne shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares Transcat and Teradyne’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Transcat||$143.90 million||0.75||$4.52 million||$0.64||23.67|
|Teradyne||$2.14 billion||3.90||$257.69 million||$2.34||18.24|
Teradyne has higher revenue and earnings than Transcat. Teradyne is trading at a lower price-to-earnings ratio than Transcat, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Transcat has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Teradyne has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for Transcat and Teradyne, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Transcat presently has a consensus target price of $20.00, suggesting a potential upside of 32.02%. Teradyne has a consensus target price of $48.45, suggesting a potential upside of 13.53%. Given Transcat’s stronger consensus rating and higher possible upside, research analysts clearly believe Transcat is more favorable than Teradyne.
This table compares Transcat and Teradyne’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Teradyne pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. Transcat does not pay a dividend. Teradyne pays out 15.4% of its earnings in the form of a dividend. Teradyne has increased its dividend for 3 consecutive years.
Teradyne beats Transcat on 12 of the 17 factors compared between the two stocks.
Transcat, Inc. provides calibration and laboratory instrument services in the United States, Canada, and internationally. It operates in two segments, Service and Distribution. The Service segment offers calibration, repair, inspection, analytical qualifications, preventative maintenance, consulting, and other related services. This segment also provides CalTrak, a proprietary document and asset management system that is used to integrate and manage the workflow of its calibration service centers and customers' assets; CalTrak Online, which provides its customers with Web-based asset management capability, as well as an off-site archive of calibration and other service records; and Compliance, Control and Cost, a cloud-based customer portal and asset management tool. The Distribution segment distributes approximately 100,000 test, measurement, and control instruments for customers' test and measurement instrumentation needs. This segment markets and sells its products through Website, digital and print advertising, proactive outbound sales, and an inbound call center. The company provides services and products to highly regulated industries, principally life science, which includes companies in the pharmaceutical, biotechnology, medical device, and other FDA-regulated industries; and additional industries, including industrial manufacturing, oil and gas and alternative energy, aerospace and defense, and other industries that require accuracy in processes and confirmation of the capabilities of their equipment. Transcat, Inc. was founded in 1964 and is headquartered in Rochester, New York.
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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