Teradyne (TER) DIvidends Date & History

Key Takeaways

• Teradyne, Inc. (TER) offers a forward annual dividend of $0.52 per share, yielding approximately 0.14% at recent prices.
• The company pays dividends quarterly, with the most recent ex-dividend date on February 13, 2026, and payment on March 13, 2026.
• Payout ratio stands at a low 13.83%, signaling exceptional earnings coverage and sustainability.
• Dividend has shown consistent growth, rising from $0.07 per share in 2017 to $0.13 quarterly today.
• TER's yield lags peers like Applied Materials (AMAT) at 0.52% and Lam Research (LRCX) at 0.40%.
• Robust free cash flow, exceeding $400 million annually, amply covers dividend obligations.

Dividend Overview

Teradyne, Inc. (TER), a leader in semiconductor test equipment, maintains a modest dividend policy suited to its growth-oriented profile in the technology sector. The company currently pays a quarterly dividend of $0.13 per share, equating to an annual payout of $0.52. This delivers a forward yield of about 0.14% based on a recent stock price around $380. The most recent ex-dividend date was February 13, 2026, with payment on March 13, 2026. Over the past five years, the average yield has been 0.39%, reflecting TER's emphasis on reinvesting earnings into innovation amid booming demand for AI and semiconductor testing solutions rather than high payouts. This positions TER as a modest dividend stock for investors prioritizing capital appreciation with a reliable, low-yield income stream.

Dividend History and Growth

Teradyne has demonstrated dividend consistency since initiating regular quarterly payments, with no recorded cuts. The quarterly dividend has grown steadily: from $0.07 per share in 2017, to $0.10 in 2020, $0.11 in 2023, $0.12 in late 2025, and $0.13 announced in January 2026. This reflects a five-year compound annual growth rate of approximately 4.3%. While not a Dividend Aristocrat with 25+ years of increases, TER's track record underscores a long-term strategy of modest, reliable growth tied to its strong financial performance in the semiconductor industry.

Dividend Sustainability and Payout Ratio

TER's dividend sustainability is robust, supported by a trailing payout ratio of 13.83%—well below 50%, leaving ample room for growth or reinvestment. Earnings per share comfortably cover the dividend, with recent non-GAAP EPS exceeding expectations. Free cash flow provides even stronger backing; the company generated $426 million in 2023 and projects over $900 million in 2026, far surpassing the roughly $80 million annual dividend obligation (based on outstanding shares). Low debt levels and healthy balance sheet further enhance stability, making dividend cuts highly unlikely even in cyclical downturns.

Dividend Compared to Industry Peers

In the semiconductor equipment sector, TER's 0.14% yield is below average. Peers like Applied Materials (AMAT) offer 0.52%, Lam Research (LRCX) 0.40%, and KLA Corporation (KLAC) 0.40%. This reflects TER's focus on growth over income, prioritizing R&D in AI-driven test systems. While peers provide higher immediate yields, TER's lower payout enables faster dividend growth potential relative to sector norms.

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Is This Stock Attractive for Dividend Investors?

Teradyne (TER) appeals to conservative dividend growth investors who value safety over high yields. Its ultra-low payout ratio and strong free cash flow generation make it suitable for those seeking reliable, slowly growing payments amid a high-growth tech environment fueled by AI and semiconductors. Income-focused investors may find the 0.14% yield insufficient compared to higher-yielding sectors, but long-term holders prioritizing capital appreciation with a safety net will appreciate the stability. TER suits portfolios balancing growth and modest income, particularly for those comfortable with technology sector volatility. Balanced against peers, it offers a defensive dividend profile in a cyclical industry.

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