Head to Head Review: Brother Industries (OTCMKTS:BRTHY) vs. Teradyne (NASDAQ:TER)

Brother Industries (OTCMKTS:BRTHY) and Teradyne (NASDAQ:TER) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Dividends

Brother Industries pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. Teradyne pays an annual dividend of $0.52 per share and has a dividend yield of 0.2%. Brother Industries pays out 30.6% of its earnings in the form of a dividend. Teradyne pays out 14.9% 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 1 consecutive years.

Valuation & Earnings

This table compares Brother Industries and Teradyne”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brother Industries	$5.76 billion	0.82	$361.54 million	$2.88	12.78
Teradyne	$3.19 billion	15.32	$554.05 million	$3.48	89.71

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

Risk & Volatility

Brother Industries has a beta of 0.05, indicating that its share price is 95% less volatile than the S&P 500. Comparatively, Teradyne has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Brother Industries and Teradyne, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brother Industries	0	1	0	0	2.00
Teradyne	0	6	10	1	2.71

Teradyne has a consensus target price of $275.53, suggesting a potential downside of 11.74%. Given Teradyne’s stronger consensus rating and higher probable upside, analysts clearly believe Teradyne is more favorable than Brother Industries.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Brother Industries	6.19%	7.84%	5.88%
Teradyne	17.37%	22.68%	16.19%

Insider and Institutional Ownership

99.8% of Teradyne shares are held by institutional investors. 0.2% of Teradyne shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Teradyne beats Brother Industries on 16 of the 18 factors compared between the two stocks.

About Brother Industries

Brother Industries, Ltd. manufactures and sells communications and printing equipment in Japan, the Americas, Europe, Asia, Oceania, the Middle East, Africa, and internationally. It operates through Printing & Solutions, Machinery, Domino, Nissei, Personal & Home, and Network & Contents segments. The Printing & Solutions segment offers inkjet printers; all-in-one black-and-white and color laser printers; scanners; and labeling systems, and label and mobile printers. The Machinery segment offers industrial sewing machines, machine tools, and garment printers. The Domino segment offers coding and marking equipment, and digital printing equipment. The Nissei segment provides gearmotors, high stiffness reducers, and gears. The Personal & Home segment provides sewing and cutting machines, sewing and embroidery machines, and commercial embroidery machines. The Network & Contents segment provides online karaoke systems and applications for smartphones/tablets, as well as content, nursing care, and video viewing services; and manages karaoke clubs. The company was formerly known as Nippon Sewing Machine Manufacturing Co. and changed its name to Brother Industries, Ltd. in 1962. Brother Industries, Ltd. was founded in 1908 and is headquartered in Nagoya, Japan.

About Teradyne

Teradyne, Inc. designs, develops, manufactures, and sells automated test systems and robotics products worldwide. It operates through four segments; Semiconductor Test, System Test, Robotics, and Wireless Test. The Semiconductor Test segment offers products and services for wafer level and device package testing of semiconductor devices in automotive, industrial, communications, consumer, smartphones, cloud, computer and electronic game, and other applications. This segment also provides FLEX test platform systems; J750 test system to address the volume semiconductor devices, including microcontrollers; Magnum platform that tests memory devices, such as flash memory and DRAM; and ETS platform for semiconductor manufacturers, and assembly and test subcontractors in the analog/mixed signal markets. It 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 semiconductor assembly and test providers. The System Test segment offers defense/aerospace test instrumentation and systems; storage and system level test systems; and circuit-board test and inspection systems. The Wireless Test segment provides wireless test solutions for silicon validation, wireless module manufacturing, and wireless end device manufacturing under the LitePoint brand. This segment also offers IQxel-MX and IQxel-MW7G series products for edge measurement performance in the manufacturing of connectivity products; IQxstream-5G and IQgig-5G family products to support 4G and 5G technologies; and IQgig-UWB+ for certification and manufacturing test support for ultra wideband products. The Robotics segment provides collaborative robotic arms, autonomous mobile robots, and advanced robotic control software for manufacturing, logistics, and industrial customers. The company was incorporated in 1960 and is headquartered in North Reading, Massachusetts.