Comparing Teradyne (TER) & Cohu (COHU)

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

Profitability

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

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

Insider and Institutional Ownership

96.2% of Teradyne shares are owned by institutional investors. Comparatively, 87.4% of Cohu shares are owned by institutional investors. 0.5% of Teradyne shares are owned by insiders. Comparatively, 3.9% of Cohu shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Teradyne and Cohu’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Teradyne	$2.14 billion	3.43	$257.69 million	$2.34	16.01
Cohu	$352.70 million	1.97	$32.84 million	$1.34	17.99

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.

Analyst Ratings

This is a summary of recent ratings and price targets for Teradyne and Cohu, as provided by MarketBeat.

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

Teradyne currently has a consensus price target of $46.67, indicating a potential upside of 24.54%. Cohu has a consensus price target of $24.25, indicating a potential upside of 0.58%. Given Teradyne’s higher probable upside, equities research analysts plainly believe Teradyne is more favorable than Cohu.

Dividends

Teradyne pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Teradyne pays out 15.4% of its earnings in the form of a dividend. Cohu pays out 17.9% 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 3 consecutive years.

Volatility and Risk

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

Summary

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

About Teradyne

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.

About Cohu

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.

5 Smart Things to Do With Your Summer Job Earnings

Back in college, many of my friends opted to take summers off and enjoy a break from their studies. I, on the other hand, always made sure to land a summer job and make the most of the money I earned. As such, I was able to limit my student debt, build some savings at a young age, and gain valuable experience that made it easier for me to get a job once I graduated.

If you have the summer off during college or even high school for that matter, it pays to go out and find work. But don't just blow your paychecks -- you have a real opportunity to put your earnings to good use. Here's how.

IMAGE SOURCE: GETTY IMAGES.

1. Pay your tuition bills

The summer before my senior year of college, I worked for an investment banking firm and held down a pretty grueling schedule. On the plus side, I wound up making enough money to cover my tuition bills for the upcoming year, which prevented me from taking out additional loans.

If you're sitting on a sizable chunk of cash from your summer gig and know you're still on the hook for some whopping tuition bills, using that money to pay them directly could minimize your student debt load. And that's something you'll be grateful for when your monthly loan payments are much lower than those of your fellow graduates.

2. Get out of credit card debt

When you're a student, it's easy to fall into the trap of racking up credit card debt. After all, at this stage of life, your income is probably limited or non-existent, and it's natural to get tempted to fall back on a credit card when a sudden expense pops up.

The problem with carrying credit card debt, however, is that it can kick-start a vicious cycle where you're accruing interest at rapid speed, thereby digging yourself further into an already undesirable hole. Therefore, if you're able to earn enough money over the summer to pay off your existing balance, it makes sense to knock it out and stop the bleeding.

3. Build an emergency fund

No matter your age, there's a good chance you'll encounter an unplanned expense at some point in the not-so-distant future, whether it's a car repair or a medical bill. And if you don't have some cash reserves, you may have no choice but to -- you guessed it -- rack up credit card debt just to cover it. That's why it pays to use your summer cash to build your emergency fund -- a fund that should, ideally, have enough money to cover at least three months' worth of living expenses.

If amassing that much over a single summer isn't feasible, do the best you can. Similarly, if you don't have living expenses in the classic sense because you're still a full-time student and your parents pay your bills at present, aim to save as much as you can so that money is available when you need it. Chances are that you'll be on the hook for your own bills once you graduate, even if that's not the case now, and having that safety net will protect you from debt when you're first starting out in the real world.

4. Save for retirement

Retirement is probably the last thing on your mind if you're a student. But it's never too early to start building long-term savings, and the sooner you do, the more opportunity your money will have to grow. One thing to keep in mind is that you're better off prioritizing emergency savings and paying off debt before funding a retirement plan. But if you're solid in those areas, socking away your summer earnings could go a long way over time.

Imagine you earn $3,000 over the summer and decide to stick it in an IRA. Even if you don't manage to contribute another dime, if you invest that money at an average annual 7% return and leave it alone for 50 years, you'll wind up with over $88,000 by the time retirement rolls around. In reality, $88,000 isn't a lot of money in the grand scheme of what could be a 30-year retirement or longer. But it's definitely a nice start, so if you don't have a more pressing need for that money, you could use it to set yourself up for the future.

5. Invest in tools that'll help you excel in your studies

While it's good to be mindful of the future, your primary focus as a student should be to do well in school. That's why it's wise to use your summer job earnings to buy the tools you need to succeed academically. Maybe you could use a new laptop because your old one is slow and crashes frequently. Or maybe a nice pair of noise-canceling headphones will set the stage for distraction-free studying. No matter what it is you specifically need, you're much better off spending your money on educational tools than random gadgets.

Tempting as it may be to relax during the summer, having that break from school offers a solid chance to earn some serious bucks. So don't blow it. Take that summer job and use your earnings wisely. You'll be thankful you did, just like I was.

Five Things You Need to Know to Start Your Day

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U.S.-China trade-war tensions escalate, the vaunted Bank for International Settlements says Bitcoin could break the Internet, and ... what will OPEC do? Here are some of the things people in markets are talking about.

No Backing Down in U.S.-China Trade War

President Donald Trump has directed the U.S. Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent. Trump said he was taking action because China “has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology.” U.S. Secretary of State Mike Pompeo amplified Trump’s tough line on trade in a speech Monday, saying U.S. action was long overdue and calling Chinese appeals for greater economic openness “ a joke.” The comments come as Chinese President Xi Jinping appears poised to match Trump blow for blow in tariffs. In his announcement of levies on Chinese goods on Friday, Trump had vowed additional duties if China retaliated — which Beijing immediately did. Analysts increasingly expect the confrontation to be a war of attrition. 

OPEC in the Spotlight

OPEC is discussing a relatively modest production increase before its meeting in Vienna this week, an attempt to bridge the gap between Russia’s push for a big boost and Iran’s insistence that no change is needed. A compromise could mean the resulting supply boost is smaller than oil traders had anticipated. Members of the Organization of Petroleum Exporting Countries are discussing an agreement that delivers 300,000 to 600,000 barrels a day of additional supply to global markets over the next few months, according to people briefed on the talks. That would be smaller than the 1.5 million-barrel-a-day quota increase that Russia has proposed.

A BOJ About-Face?

The Bank of Japan should accept that it is making no headway in its efforts to get to 2 percent inflation and start normalizing policy, according to Tokyo University professor Tsutomu Watanabe, a former BOJ official and longtime advocate of the price-increase goal. "The last five years have confirmed that the policy hasn’t had any effect" on prices, Watanabe said in an interview this month, referring to the central bank’s aggressive easing measures aimed at stoking inflation. "At some point you have to give up." Watanabe first called for the introduction of an inflation target in the late 1990s.

Bitcoin Could Break the Internet

The Bank for International Settlements just told the cryptocurrency world it’s not ready for prime time —  and,  as far as mainstream financial services, go, may never be. In a withering 24-page article released Sunday as part of its annual economic report, the BIS said Bitcoin and its ilk suffered from “a range of shortcomings” that would prevent cryptocurrencies from ever fulfilling the lofty expectations that prompted an explosion of interest —  and investment — in the would-be asset class. The 88-year-old institution, based in Basel, Switzerland, analyzed what it would take for the blockchain software that underpins Bitcoin to process the digital retail transactions currently handled by national payment systems. As ledgers swell, the researchers found, they would eventually overwhelm everything from individual smartphones to servers. “The associated communication volumes could bring the Internet to a halt,” the report said.

A Warning for the Developed World

Former U.S. Treasury Secretary Lawrence Summers warned that developed countries are badly equipped for another recession, both economically and politically, and that central banks should be wary of raising interest rates just to stop inflation from running a little hot. “The consequences of another economic downturn dwarf and massively exceed any adverse consequences associated with inflation pushing a bit above 2 percent,” Summers said Monday at a European Central Bank conference in Sintra, Portugal. His comments echoed sentiments earlier on Monday by billionaire hedge fund manager Paul Tudor Jones. “The next recession’s really frightening, because we won’t have any stabilizers,” Jones said on Yahoo Finance. “Monetary policy will exhaust really quickly,” while fiscal stimulus won’t be available, he said.

What we’ve been reading

This is what caught our eye over the last 24 hours.

ZTE talks on the docket in Washington. Investors aren’t discerning as they pull out of emerging Asia.  Don’t declare the end of easy money just yet. Google is training machines to predict when people will die. Trump lambastes Merkel over migrant crisis.  Here’s the mistake you made in your World Cup bracket.