Brooks Automation (NASDAQ: BRKS) and Cohu (NASDAQ:COHU) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Brooks Automation 8.34% 11.25% 8.96%
Cohu 6.21% 11.59% 7.76%

Institutional and Insider Ownership

90.4% of Brooks Automation shares are owned by institutional investors. Comparatively, 83.9% of Cohu shares are owned by institutional investors. 2.2% of Brooks Automation shares are owned by company insiders. Comparatively, 6.0% of Cohu shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Brooks Automation pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Brooks Automation pays out 50.0% of its earnings in the form of a dividend. Cohu pays out 34.8% 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.

Risk & Volatility

Brooks Automation has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Cohu has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Valuation and Earnings

This table compares Brooks Automation and Cohu’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brooks Automation $668.56 million 2.61 $95.89 million $0.80 32.43
Cohu $314.92 million 1.63 $37.41 million $0.69 26.61

Brooks Automation has higher revenue and earnings than Cohu. Cohu is trading at a lower price-to-earnings ratio than Brooks Automation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Brooks Automation and Cohu, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brooks Automation 0 1 5 0 2.83
Cohu 0 2 2 0 2.50

Brooks Automation presently has a consensus price target of $27.67, suggesting a potential upside of 6.66%. Cohu has a consensus price target of $23.67, suggesting a potential upside of 28.90%. Given Cohu’s higher probable upside, analysts plainly believe Cohu is more favorable than Brooks Automation.

Summary

Brooks Automation beats Cohu on 12 of the 16 factors compared between the two stocks.

Brooks Automation Company Profile

Brooks Automation, Inc. is a provider of automation and cryogenic solutions for various applications and markets. The Company operates through two segments: Brooks Semiconductor Solutions Group and Brooks Life Science Systems. The Brooks Semiconductor Solutions Group segment offers critical automated transport, vacuum and contamination controls solutions and services. Its product offerings include robots and integrated automation systems for handling of substrates. It is also a provider of cryogenic components to create vacuum and thermal stability within critical operating environments in the manufacturing process. It also offers equipment for automated contamination control, conditioning and metrology solutions for wafer and reticle carriers. The Brooks Life Science Systems segment offers sample life cycle management solutions that provide life science and bioscience customers with a range of sample management solutions for scientific research and support drug development.

Cohu Company Profile

Cohu, Inc. is a supplier of semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors and thermal sub-systems used by global semiconductor manufacturers and test subcontractors. It develops, manufactures, sells and services a line of equipment capable of handling a range of integrated circuits and light-emitting diodes. It operates through semiconductor equipment segment. It offers products for the pick-and-place, gravity-feed, test-in-strip and turret handling, MEMS, burn-in and system-level test markets. It sells various products, including Delta MATRiX, Delta Pyramid, Delta Eclipse, Delta LinX, Rasco SO1000, Rasco SO2000, Rasco Saturn and Jupiter, Rasco Jaguar, Ismeca NY32, Ismeca NY20 and Delta Fusion HD. Its manufacturing operations are located in Malacca, Malaysia (handlers); Poway, California (thermal subsystems); Laguna, the Philippines (kits and contactors); Kolbermoor, Germany (handlers), and Osaka, Japan (contactors).

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