Agilent Technologies (NYSE: A) is the world market leader in the test and measurement (T&M) business with 2006 sales of $5 billion. Its closest but distant competitors are Tektronix (TEK)--2006 sales of $1 billion--and National Instruments (NATI)--2006 sales of $600 million. Similar to other smaller competitors like Lakeshore and Keithley Instruments (KEI), these two competitors have succeeded by focusing on niche markets.

Agilent, on the other hand, is the broadest and most diversified T&M company. Since it was spun off from parent company Hewlett-Packard (HPQ) in 1999, Agilent has undergone a period of significant restructuring during which it divested its assets in semiconductor testing and manufacturing, as well as developed a joint venture in LED lighting technology, in order to rededicate itself back on its core scientific and R&D markets. The advantages of this approach are twofold. First, the R&D market is more stable, as it is usually sheltered from macroeconomic trends. Second, the semiconductor test and manufacturing business is highly cyclical, tied mostly to the ups and downs of the IT hardware industry.

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