In the evolving landscape of automation and technology, Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER) stand out as two pivotal players. Both companies operate in industries that are increasingly intertwined—industrial automation and semiconductors—making their comparison particularly relevant. With distinct innovation strategies and market approaches, they cater to overlapping sectors, including automotive and logistics. Join me as we delve into the characteristics and performance of these companies to uncover which one might be the more compelling choice for your investment portfolio.
Table of contents
Company Overview
Rockwell Automation, Inc. Overview
Rockwell Automation, Inc. (Ticker: ROK), founded in 1903 and headquartered in Milwaukee, Wisconsin, is a leader in industrial automation and digital transformation solutions. The company operates in three segments: Intelligent Devices, Software & Control, and Lifecycle Services. Rockwell provides a comprehensive range of hardware and software products that cater to various industries, including automotive, semiconductor, and food and beverage. With a market cap of approximately $41.8B, Rockwell focuses on enhancing operational efficiency through advanced automation technologies. The company emphasizes sustainable industrial practices, positioning itself as a key player in the evolving landscape of smart manufacturing.
Teradyne, Inc. Overview
Teradyne, Inc. (Ticker: TER), established in 1960 and located in North Reading, Massachusetts, specializes in automatic test equipment and robotics. With a market cap of around $27.0B, the company operates through several segments, including Semiconductor Test, System Test, Industrial Automation, and Wireless Test. Teradyne’s products are integral to the testing processes in automotive, communications, and consumer electronics, among others. The firm is recognized for its innovative solutions, particularly in robotics, where it supplies collaborative robotic arms and autonomous mobile robots, thereby positioning itself as a pivotal player in the automation sector.
Key similarities between Rockwell Automation and Teradyne include their focus on automation and technology-driven solutions. However, they differ in their core markets; Rockwell primarily serves industrial sectors, whereas Teradyne is heavily focused on semiconductor testing and robotics. Both companies demonstrate robust growth potential but cater to distinct industry needs.
Income Statement Comparison
The following table presents a comparison of the most recent income statements for Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER) to help you assess their financial health.
| Metric | Rockwell Automation, Inc. (ROK) | Teradyne, Inc. (TER) |
|---|---|---|
| Revenue | 8.34B | 2.82B |
| EBITDA | 1.40B | 732M |
| EBIT | 1.07B | 613M |
| Net Income | 869M | 542M |
| EPS | 7.69 | 3.41 |
Interpretation of Income Statement
In the most recent fiscal year, Rockwell Automation (ROK) demonstrated a revenue growth to 8.34B, up from 8.26B in the prior year, while Teradyne (TER) saw a slight increase in revenue to 2.82B from 2.68B. ROK’s net income also rose significantly to 869M, although operating margins showed a modest contraction due to increased expenses. Meanwhile, Teradyne’s net income was 542M, reflecting stability but highlighting a need for improved efficiency as margins tapered slightly. Overall, ROK’s growth trend appears robust, while TER’s performance underscores the importance of focusing on cost management.
Financial Ratios Comparison
The following table presents a comparative analysis of key financial ratios for Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER), based on the most recent fiscal data.
| Metric | ROK | TER |
|---|---|---|
| ROE | 38.79% | 19.24% |
| ROIC | 16.16% | 17.25% |
| P/E | 27.18 | 36.93 |
| P/B | 6.99 | 7.11 |
| Current Ratio | 2.37 | 2.91 |
| Quick Ratio | 1.56 | 1.84 |
| D/E | 0.97 | 0.03 |
| Debt-to-Assets | 31.67% | 2.07% |
| Interest Coverage | 8.37 | 165.54 |
| Asset Turnover | 0.80 | 0.76 |
| Fixed Asset Turnover | 8.76 | 4.88 |
| Payout ratio | 59.95% | 14.09% |
| Dividend yield | 1.87% | 0.38% |
Interpretation of Financial Ratios
ROK showcases a higher return on equity (ROE) and robust interest coverage, indicating strong profitability and ability to meet interest obligations. However, its price-to-earnings (P/E) ratio suggests it may be overvalued compared to TER, which has a lower P/E but maintains a healthy ROIC. TER’s significantly lower debt-to-equity (D/E) ratio reflects a conservative capital structure, reducing risk. Overall, ROK appears slightly riskier, while TER offers a more stable investment profile.
Dividend and Shareholder Returns
Rockwell Automation, Inc. (ROK) pays a dividend with a current yield of 1.87% and a payout ratio of 59.9%, indicating a sustainable distribution supported by free cash flow. Meanwhile, Teradyne, Inc. (TER) does not pay dividends, as it prioritizes reinvestment in growth and innovation, evidenced by a low payout ratio of 15.1%. Both companies engage in share buyback programs, which can enhance shareholder value. Overall, ROK’s dividends and TER’s growth strategy both align with long-term value creation, albeit through different approaches.
Strategic Positioning
Rockwell Automation (ROK) commands a significant share in the industrial automation market, driven by its comprehensive solutions across Intelligent Devices, Software & Control, and Lifecycle Services. However, Teradyne (TER) is making strides in the semiconductor test space, leveraging its technology in autonomous robotics and wireless testing. Both companies face competitive pressure from emerging players and technological disruptions that could reshape their respective industries. Staying ahead will require innovation and strategic adaptation to maintain market leadership.
Stock Comparison
In this section, I will analyze the stock price movements and trading dynamics of Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER) over the past year, highlighting significant trends that have emerged.
Trend Analysis
Rockwell Automation, Inc. (ROK) Over the past year, ROK has experienced a price change of +19.97%, indicating a bullish trend. Notably, the stock reached a high of 377.13 and a low of 227.11. The trend shows acceleration, with a recent price change of +9.63% from September 7, 2025, to November 23, 2025. The standard deviation of 14.05 suggests moderate volatility in the recent trend.
Teradyne, Inc. (TER) TER has had a substantial price change of +55.02% over the past year, also reflecting a bullish trend. The stock’s highest price was 182.28, while the lowest was 68.72. Similar to ROK, TER’s trend shows acceleration with a recent price change of +39.96% during the same period. The standard deviation of 23.32 indicates a higher level of volatility compared to ROK.
Both companies exhibit strong buyer dominance in recent trading, with ROK showing a buyer dominance percentage of 71.11% and TER at 69.36%. This suggests that investor sentiment remains positive for both stocks, reinforcing their bullish trends.
Analyst Opinions
Recent analyst recommendations indicate a mixed outlook for Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER). ROK holds a C- rating, with analysts citing concerns over its financial metrics, particularly in return on equity and asset management. Conversely, TER has a B rating, supported by strong performance in return on assets and equity. Analysts recommend a hold on ROK, while TER is viewed more favorably with a consensus buy. Overall, the consensus for ROK is a cautious hold, while TER garners a positive buy sentiment.
Stock Grades
In this section, I present the latest stock ratings for Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER) from reputable grading companies.
Rockwell Automation, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | maintain | Neutral | 2025-11-11 |
| Morgan Stanley | maintain | Overweight | 2025-11-10 |
| Barclays | maintain | Overweight | 2025-11-07 |
| Wells Fargo | maintain | Equal Weight | 2025-11-07 |
| JP Morgan | maintain | Neutral | 2025-10-15 |
| Oppenheimer | maintain | Outperform | 2025-10-14 |
| Wells Fargo | maintain | Equal Weight | 2025-10-06 |
| Barclays | maintain | Overweight | 2025-08-14 |
| Wells Fargo | downgrade | Equal Weight | 2025-08-08 |
| Oppenheimer | maintain | Outperform | 2025-08-07 |
Teradyne, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | maintain | Buy | 2025-11-12 |
| Goldman Sachs | maintain | Sell | 2025-10-30 |
| JP Morgan | maintain | Neutral | 2025-10-30 |
| UBS | maintain | Buy | 2025-10-30 |
| Evercore ISI Group | maintain | Outperform | 2025-10-30 |
| Stifel | maintain | Hold | 2025-10-28 |
| Evercore ISI Group | maintain | Outperform | 2025-10-28 |
| UBS | maintain | Buy | 2025-10-20 |
| Morgan Stanley | maintain | Equal Weight | 2025-10-14 |
| Stifel | maintain | Hold | 2025-10-13 |
Overall, the grades for both companies reflect a trend of maintaining current ratings with a mix of Overweight and Hold positions, indicating a cautious but stable outlook from analysts. Notably, Teradyne has received both Buy and Sell ratings, suggesting a divergence in sentiment among analysts.
Target Prices
The latest consensus target prices for Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER) indicate optimistic outlooks from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Rockwell Automation, Inc. | 391 | 345 | 371.5 |
| Teradyne, Inc. | 215 | 119 | 172.67 |
For Rockwell Automation, the consensus price of 371.5 is slightly below the current market price of 372.48, suggesting analysts expect modest growth. In contrast, Teradyne’s consensus target of 172.67 is significantly higher than its current price of 168.23, indicating strong upside potential according to analysts.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER) based on their recent performance metrics.
| Criterion | Rockwell Automation, Inc. | Teradyne, Inc. |
|---|---|---|
| Diversification | Strong across industries | Focused on semiconductors and automation |
| Profitability | Net profit margin: 15.3% | Net profit margin: 19.2% |
| Innovation | High R&D investment | Leading in testing technology |
| Global presence | Significant international reach | Strong in North America and Asia |
| Market Share | 6% in automation sector | 10% in semiconductor testing |
| Debt level | Debt-to-equity: 1.17 | Debt-to-equity: 0.03 |
Key takeaways include Teradyne’s superior profitability and lower debt level compared to Rockwell Automation. However, Rockwell boasts a broader diversification across various industries, which may mitigate risks in volatile markets.
Risk Analysis
In the following table, I present a comparative analysis of the risks associated with Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER). This analysis helps in understanding the potential challenges each company may face.
| Metric | Rockwell Automation, Inc. (ROK) | Teradyne, Inc. (TER) |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | Low |
| Operational Risk | Moderate | High |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Moderate | High |
Both companies face significant market risk, particularly due to fluctuating demand in the industrial and technology sectors. Teradyne, with its higher operational risks, is susceptible to supply chain disruptions, while Rockwell faces moderate regulatory and geopolitical challenges that could impact growth. Recent global supply chain issues have highlighted these vulnerabilities.
Which one to choose?
In analyzing Rockwell Automation, Inc. (ROK) and Teradyne, Inc. (TER), I find that TER appears more favorable for investors seeking growth. Teradyne boasts a higher return on equity at 19.24% and a solid net profit margin of 19.23% compared to ROK’s 11.54%. Additionally, TER’s stock trend is bullish, with a price increase of 55.02% over the last 12 months, suggesting strong momentum. In contrast, ROK has a lower overall rating of C- versus TER’s B, highlighting its weaker financial metrics.
For investors focused on growth, I recommend Teradyne, while those prioritizing stability may still consider Rockwell but should be cautious of its lower margins and overall ratings. Both companies face risks such as market competition and supply chain challenges.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Rockwell Automation, Inc. and Teradyne, Inc. to enhance your investment decisions:
