Breakup will unlock Agilent’s value

Article Excerpt

AGILENT TECHNOLOGIES INC. $54 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 333.0 million; Market cap: $18.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.0%; TSINetwork Rating: Average; www.agilent.com) plans to break itself into two publicly traded companies. One of these businesses will keep the Agilent name and focus on testing equipment for medical-research labs. In the parent company’s 2013 fiscal year, which ended October 31, 2013, the division that will form this new firm saw its sales rise 9.9%, to $3.9 billion from $3.5 billion in fiscal 2012. That’s mainly due to strong demand from pharmaceutical makers, and rising sales of gear for testing food safety in China and other developing countries. This company will pay a dividend comparable to Agilent’s current 1.0% yield. The second company will make testing systems for improving electronics, such as cellphones and computer equipment. Its fiscal 2013 revenue fell 12.9%, to $2.9 billion from $3.3 billion. That’s partly because U.S. budget…