In the dynamic landscape of investing, selecting the right companies for your portfolio is crucial. Today, I will compare Teradyne, Inc. (TER) and Hillenbrand, Inc. (HI), two companies operating in the technology and industrial sectors, respectively. Both firms showcase remarkable innovation strategies and have significant market overlaps in automation and advanced manufacturing. As we delve into their operations and growth potential, I will help you determine which company might be the more compelling investment opportunity.
Table of contents
Company Overview
Teradyne, Inc. Overview
Teradyne, Inc. is a leading provider of automatic test equipment (ATE) and robotic solutions, primarily serving the semiconductor industry. Established in 1960 and headquartered in North Reading, Massachusetts, Teradyne designs and manufactures products that play a crucial role in testing semiconductor devices and enhancing manufacturing processes. Its diverse segments include Semiconductor Test, System Test, Industrial Automation, and Wireless Test, catering to a broad array of applications from automotive to consumer electronics. With a market capitalization of approximately $29.2B, Teradyne leverages its innovative technology to serve major clients globally, ensuring high reliability and efficiency in testing solutions.
Hillenbrand, Inc. Overview
Founded in 1906, Hillenbrand, Inc. operates as a diversified industrial company with a strong foothold in the machinery sector. Headquartered in Batesville, Indiana, the company functions through three main segments: Advanced Process Solutions, Molding Technology Solutions, and Batesville, which specializes in funeral service products. With a market cap of around $2.2B, Hillenbrand caters to various industries, including automotive, food, pharmaceuticals, and consumer goods, by providing tailored equipment and services. The company aims to deliver innovative solutions that enhance productivity and operational efficiency for its clients worldwide.
Key similarities and differences
Both Teradyne and Hillenbrand operate in sectors focused on technology and industrial solutions, emphasizing innovation and efficiency in their respective fields. However, Teradyne primarily concentrates on semiconductor testing and automation, while Hillenbrand diversifies its offerings across industrial machinery and funeral services, highlighting their distinct target markets and operational strategies.
Income Statement Comparison
The following table presents a comparative overview of the income statements for Teradyne, Inc. and Hillenbrand, Inc. for their most recent fiscal years.
| Metric | Teradyne, Inc. (TER) | Hillenbrand, Inc. (HI) |
|---|---|---|
| Market Cap | 29.22B | 2.24B |
| Revenue | 2.82B | 2.67B |
| EBITDA | 732.41M | 230.60M |
| EBIT | 612.67M | 92.10M |
| Net Income | 542.37M | 43.10M |
| EPS | 3.41 | 0.74 |
| Fiscal Year | 2024 | 2025 |
Interpretation of Income Statement
In the most recent fiscal year, Teradyne showcased a robust revenue growth of approximately 5.7% from the prior year, alongside a significant increase in net income, indicating effective cost management and operational efficiency. Hillenbrand, on the other hand, experienced a decline in revenue by about 16% compared to the previous year, resulting in a notable decrease in net income, reflecting challenges in maintaining margins. The EBITDA margin for Teradyne remains strong, while Hillenbrand’s margins have compressed, suggesting areas for operational improvement. Overall, Teradyne appears to be in a stronger financial position compared to Hillenbrand.
Financial Ratios Comparison
In this section, I will present a comparative analysis of key financial metrics for Teradyne, Inc. (TER) and Hillenbrand, Inc. (HI).
| Metric | Teradyne, Inc. | Hillenbrand, Inc. |
|---|---|---|
| ROE | 19.24% | 3.66% |
| ROIC | 17.25% | -32.60% |
| P/E | 36.93 | -9.28 |
| P/B | 7.11 | 1.34 |
| Current Ratio | 2.91 | 1.22 |
| Quick Ratio | 1.84 | 0.88 |
| D/E | 0.03 | 1.12 |
| Debt-to-Assets | 0.02 | 0.36 |
| Interest Coverage | 165.54 | 0.55 |
| Asset Turnover | 0.76 | 0.60 |
| Fixed Asset Turnover | 4.88 | 7.80 |
| Payout Ratio | 14.09% | -121.69% |
| Dividend Yield | 0.38% | 3.32% |
Interpretation of Financial Ratios
Teradyne displays strong financial health with a solid ROE and low debt levels, indicating efficient use of equity and manageable leverage. Conversely, Hillenbrand struggles with negative earnings growth and high debt relative to assets, raising concerns about its financial stability and operational efficiency. Investors should approach HI with caution, given its weak ratios and potential volatility.
Dividend and Shareholder Returns
Teradyne, Inc. (TER) has a dividend payout ratio of approximately 14.1%, with a dividend yield of 0.38% and a consistent trend in dividend payments. Their share buyback programs indicate a commitment to enhance shareholder value. In contrast, Hillenbrand, Inc. (HI) does not currently pay dividends, reflecting its focus on reinvestment during a growth phase. However, it has initiated share buyback programs, suggesting a strategic approach to enhancing shareholder returns. Ultimately, both companies exhibit strategies that could lead to sustainable long-term value creation for shareholders.
Strategic Positioning
In the semiconductor market, Teradyne, Inc. (TER) holds a significant position with a market cap of $29.2B and a robust range of testing solutions that cater to various applications. Its competitive pressure is marked by rapid technological advancements, which demand continuous innovation. Conversely, Hillenbrand, Inc. (HI), with a market cap of $2.2B, operates in industrial machinery, facing challenges from evolving manufacturing technologies and market diversification. Both companies must navigate these dynamics to maintain their market shares effectively.
Stock Comparison
In analyzing the stock price movements of Teradyne, Inc. (TER) and Hillenbrand, Inc. (HI) over the past year, we observe significant dynamics with marked differences in their performance trajectories.
Trend Analysis
For Teradyne, Inc. (TER), the stock has exhibited a remarkable bullish trend with a percentage change of +76.99% over the past year. The highest price recorded was 182.28, while the lowest was 68.72, indicating a substantial recovery and upward momentum. The trend shows acceleration, supported by a standard deviation of 24.53, reflecting notable price volatility.
In the recent analysis period from September 14, 2025, to November 30, 2025, the stock has maintained a positive change of +62.05%, further reinforcing the bullish outlook with a trend slope of 5.94.
Conversely, Hillenbrand, Inc. (HI) has faced a bearish trend with a percentage change of -29.48% over the same one-year period. The stock’s highest point was 50.29, while it dipped to a low of 18.75, indicating significant downward pressure. This trend is also marked by acceleration, as evidenced by a standard deviation of 9.44.
Despite this overall bearish trend, there has been a recent uptick with a percentage change of +29.59 from September 14 to November 30, 2025. However, this increase does not alter the long-term trajectory and should be viewed cautiously. The trend slope during this recent period is relatively flat at 0.8, suggesting limited momentum.
In conclusion, while Teradyne demonstrates strong upward potential, Hillenbrand’s challenges warrant careful consideration for investors looking to build a balanced portfolio.
Analyst Opinions
Recent analyst recommendations for Teradyne, Inc. (TER) indicate a “Buy” rating, with analysts highlighting strong return on assets and equity as key strengths, despite lower scores in price-to-earnings and price-to-book ratios. Analysts suggest that the company’s solid fundamentals justify the positive outlook.
On the other hand, Hillenbrand, Inc. (HI) has received a “Buy” rating as well, with analysts praising its discounted cash flow performance and return on assets. The consensus for both companies in 2025 leans towards a “Buy” recommendation, reflecting confidence in their growth potential.
Stock Grades
Recent stock ratings from reliable grading companies provide us with valuable insights into the investment landscape for Teradyne, Inc. and Hillenbrand, Inc. Below are the details for each company:
Teradyne, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | maintain | Buy | 2025-11-12 |
| JP Morgan | maintain | Neutral | 2025-10-30 |
| Goldman Sachs | maintain | Sell | 2025-10-30 |
| Evercore ISI Group | maintain | Outperform | 2025-10-30 |
| UBS | maintain | Buy | 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 |
Hillenbrand, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| DA Davidson | maintain | Neutral | 2025-11-20 |
| DA Davidson | maintain | Neutral | 2025-10-16 |
| CJS Securities | downgrade | Market Perform | 2025-10-16 |
| Keybanc | downgrade | Sector Weight | 2025-05-08 |
| DA Davidson | maintain | Neutral | 2025-05-01 |
| DA Davidson | maintain | Neutral | 2024-11-15 |
| Keybanc | maintain | Overweight | 2024-11-14 |
| DA Davidson | downgrade | Neutral | 2024-08-12 |
| DA Davidson | maintain | Buy | 2021-02-08 |
| DA Davidson | maintain | Buy | 2021-02-07 |
Overall, Teradyne has maintained strong grades from multiple reputable firms, with a mix of “Buy” and “Outperform” ratings indicating a positive outlook. Conversely, Hillenbrand has seen some downgrades, particularly from CJS Securities and Keybanc, suggesting a more cautious sentiment among analysts. This divergence in grades reflects differing market positions and prospects for these two companies.
Target Prices
The consensus among analysts indicates varied target prices for Teradyne, Inc. and Hillenbrand, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Teradyne, Inc. | 215 | 119 | 172.67 |
| Hillenbrand, Inc. | 32 | 32 | 32 |
For Teradyne, the target consensus of 172.67 suggests a slight downside from the current price of 181.9, while Hillenbrand’s target aligns closely with its current price of 31.84, indicating stability in expectations.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of Teradyne, Inc. (TER) and Hillenbrand, Inc. (HI) based on the latest financial data and company performance metrics.
| Criterion | Teradyne, Inc. | Hillenbrand, Inc. |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | Strong (20%) | Weak (2%) |
| Innovation | High (focus on tech) | Moderate (industrial focus) |
| Global presence | Strong | Moderate |
| Market Share | Leading | Niche player |
| Debt level | Low (2%) | High (36%) |
Key takeaways indicate that Teradyne showcases strong profitability and low debt levels, making it an attractive option for investors seeking stability. In contrast, Hillenbrand’s high debt and lower profitability may pose risks for investors.
Risk Analysis
The following table outlines the key risks associated with Teradyne, Inc. (TER) and Hillenbrand, Inc. (HI) as of 2025.
| Metric | Teradyne, Inc. | Hillenbrand, Inc. |
|---|---|---|
| Market Risk | Moderate | High |
| Regulatory Risk | Low | Moderate |
| Operational Risk | Low | High |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Moderate | High |
In summary, Hillenbrand, Inc. faces higher market and operational risks compared to Teradyne, Inc. The ongoing global economic uncertainties and regulatory changes in the industrial sector could significantly impact Hillenbrand’s performance.
Which one to choose?
In comparing Teradyne, Inc. (TER) and Hillenbrand, Inc. (HI), both companies show distinct financial profiles. TER has a higher gross profit margin of 58.5% versus HI’s 33.7%, indicating stronger profitability. Additionally, TER’s net profit margin stands at 19.2%, while HI’s is only 2.0%. From a valuation perspective, TER’s P/E ratio is notably higher at 36.9 compared to HI’s 5.2, which suggests that investors may be paying a premium for TER’s earnings. Analysts rate both companies as “B”, but HI’s overall rating is slightly better at “B+” with a stronger score in discounted cash flow.
For growth-oriented investors, TER may appear more favorable due to its bullish stock trend and solid financial metrics, while those seeking stability might lean towards HI given its lower valuation metrics and recent positive price movement.
However, I must caution that both companies face industry-specific risks, including competition, market dependence, and valuation pressures.
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 Teradyne, Inc. and Hillenbrand, Inc. to enhance your investment decisions:
