Head-To-Head Analysis: Veralto (NYSE:VLTO) versus Advantest (OTCMKTS:ATEYY)

Advantest (OTCMKTS:ATEYY) and Veralto (NYSE:VLTO) are both large-cap technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider & Institutional Ownership

0.0% of Advantest shares are held by institutional investors. Comparatively, 91.3% of Veralto shares are held by institutional investors. 0.4% of Veralto shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Advantest has a beta of 2.12, indicating that its stock price is 112% more volatile than the S&P 500. Comparatively, Veralto has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Profitability

This table compares Advantest and Veralto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advantest	37.15%	58.10%	38.75%
Veralto	17.35%	34.76%	13.38%

Valuation and Earnings

This table compares Advantest and Veralto”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advantest	$7.50 billion	19.90	$2.48 billion	$4.06	50.20
Veralto	$5.50 billion	4.18	$940.00 million	$3.96	23.84

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

Analyst Recommendations

This is a summary of current ratings for Advantest and Veralto, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advantest	0	1	0	2	3.33
Veralto	0	4	6	0	2.60

Veralto has a consensus target price of $112.50, suggesting a potential upside of 19.18%. Given Veralto’s higher probable upside, analysts clearly believe Veralto is more favorable than Advantest.

Dividends

Advantest pays an annual dividend of $0.26 per share and has a dividend yield of 0.1%. Veralto pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Advantest pays out 6.4% of its earnings in the form of a dividend. Veralto pays out 13.1% 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. Veralto has raised its dividend for 1 consecutive years. Veralto is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Advantest beats Veralto on 12 of the 18 factors compared between the two stocks.

About Advantest

Advantest Corporation manufactures and sells semiconductors, component test system products, and mechatronics related products in Japan, the Americas, Europe, and Asia. The company operates through three segments: Semiconductor and Component Test System; Mechatronics Related Business; and Services, Support and Others. The Semiconductor and Component Test System segment provides customers with test system products for the semiconductor industry and the electronic parts industry, as well as offers test systems for SoC semiconductor devices, and test systems for memory semiconductors devices. The Mechatronics Related Business segment provides test handlers; mechatronic-applied products for handling semiconductor devices; and device interfaces, which serve as interfaces with the devices that are measured, as well as nano-technology related products. The Services, Support and Others segment provides test solutions of system level testing customer solutions for the semiconductor and modules, and support services. This segment is also involved in the sale of consumables and used products, and equipment lease and other businesses. It also engages in the research and development activities and provides maintenance and support services. The company was incorporated in 1946 and is headquartered in Tokyo, Japan.

About Veralto

Veralto Corporation provides water analytics, water treatment, marking and coding, and packaging and color services worldwide. It operates through two segments, Water Quality (WQ) and Product Quality & Innovation (PQI). The WQ segment offers precision instrumentation and water treatment technologies to measure, analyze, and treat water in residential, commercial, municipal, industrial, research, and natural resource applications through the Hach, Trojan Technologies, and ChemTreat brands. This segment provides water solutions, including chemical reagents, services, and digital solutions. The PQI segment offers inline printing solutions for products and packaging with marking and coding systems; marking and coding for packaged goods and related consumables; design software and imaging systems for the creation of new packaging designs; color management solutions for printed packages and consumer and industrial products; color standard services for the design industry; and a software solution that provides digital asset management, marketing resource management, and product information management. This segment sells its products and services through the Videojet, Linx, Esko, X-Rite, and Pantone brands to regulated industries, including municipal utilities, food and beverage, pharmaceutical, and industrials. The company was formerly known as DH EAS Holding Corp. and changed its name to Veralto Corporation in February 2023. Veralto Corporation was incorporated in 2022 and is headquartered in Waltham, Massachusetts.