NasdaqGS:ADI

Stock Analysis Report

Executive Summary

Analog Devices, Inc. designs, manufactures, and markets integrated circuits (ICs), algorithms, software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies.

Rewards

PE ratio (32.4x) is below the Semiconductor industry average (34.5x)

Earnings are forecast to grow 8.11% per year

Pays a high and reliable dividend of 1.81%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Analog Devices's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ADI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.8%

ADI

2.6%

US Semiconductor

2.0%

US Market


1 Year Return

30.8%

ADI

46.5%

US Semiconductor

23.6%

US Market

Return vs Industry: ADI underperformed the US Semiconductor industry which returned 48.5% over the past year.

Return vs Market: ADI exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

ADIIndustryMarket
7 Day0.8%2.6%2.0%
30 Day0.6%4.4%3.9%
90 Day9.1%19.0%12.0%
1 Year33.5%30.8%49.4%46.5%26.2%23.6%
3 Year74.5%63.9%94.7%83.7%53.2%43.3%
5 Year146.4%119.2%152.2%127.3%75.7%56.3%

Price Volatility Vs. Market

How volatile is Analog Devices's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Analog Devices undervalued compared to its fair value and its price relative to the market?

32.43x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ADI ($119.53) is trading above our estimate of fair value ($83.25)

Significantly Below Fair Value: ADI is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ADI is good value based on its PE Ratio (32.4x) compared to the Semiconductor industry average (34.5x).

PE vs Market: ADI is poor value based on its PE Ratio (32.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ADI is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: ADI is overvalued based on its PB Ratio (3.8x) compared to the US Semiconductor industry average (3.3x).


Next Steps

Future Growth

How is Analog Devices forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

8.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADI's forecast earnings growth (8.1% per year) is above the savings rate (1.7%).

Earnings vs Market: ADI's earnings (8.1% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: ADI's earnings are forecast to grow, but not significantly.

Revenue vs Market: ADI's revenue (2.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: ADI's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ADI's Return on Equity is forecast to be low in 3 years time (14.2%).


Next Steps

Past Performance

How has Analog Devices performed over the past 5 years?

20.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ADI has high quality earnings.

Growing Profit Margin: ADI's current net profit margins (22.7%) are lower than last year (24.1%).


Past Earnings Growth Analysis

Earnings Trend: ADI's earnings have grown significantly by 20.4% per year over the past 5 years.

Accelerating Growth: ADI's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ADI had negative earnings growth (-9.4%) over the past year, making it difficult to compare to the Semiconductor industry average (-15.8%).


Return on Equity

High ROE: ADI's Return on Equity (11.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Analog Devices's financial position?


Financial Position Analysis

Short Term Liabilities: ADI's short term assets ($2.0B) exceed its short term liabilities ($1.5B).

Long Term Liabilities: ADI's short term assets ($2.0B) do not cover its long term liabilities ($8.2B).


Debt to Equity History and Analysis

Debt Level: ADI's debt to equity ratio (48.1%) is considered high.

Reducing Debt: ADI's debt to equity ratio has increased from 18.4% to 48.1% over the past 5 years.

Debt Coverage: ADI's debt is well covered by operating cash flow (40%).

Interest Coverage: ADI's interest payments on its debt are well covered by EBIT (8.3x coverage).


Balance Sheet

Inventory Level: ADI has a low level of unsold assets or inventory.

Debt Coverage by Assets: ADI's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

What is Analog Devices's current dividend yield, its reliability and sustainability?

1.81%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years1.9%

Current dividend yield vs market & industry

Notable Dividend: ADI's dividend (1.81%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: ADI's dividend (1.81%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: ADI's dividends per share have been stable in the past 10 years.

Growing Dividend: ADI's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.6%), ADI's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ADI's dividends in 3 years are forecast to be well covered by earnings (40% payout ratio).


Next Steps

Management

What is the CEO of Analog Devices's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Vince Roche (59yo)

6.7yrs

Tenure

US$11,007,691

Compensation

Mr. Vincent T. Roche, also known as Vince, has been the President of Analog Devices, Inc. since November 5, 2012 and has been its Chief Executive Officer since May 2013. Mr. Roche served as an Interim Chie ...


CEO Compensation Analysis

Compensation vs Market: Vince's total compensation ($USD11.01M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Vince's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.3yrs

Average Tenure

59yo

Average Age

Experienced Management: ADI's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

6.7yrs

Average Tenure

64yo

Average Age

Experienced Board: ADI's board of directors are considered experienced (6.7 years average tenure).


Insider Trading

Insider Buying: ADI insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$2,398,98603 Jan 20
Raymond Stata
EntityIndividual
Role
Chairman of the Board
Founder & Chairman
Shares20,000
Max PriceUS$119.95
SellUS$594,47223 Dec 19
Prashanth Mahendra-Rajah
EntityIndividual
Role
Chief Financial Officer
Senior VP of Finance & CFO
Shares4,950
Max PriceUS$120.10
SellUS$210,28223 Dec 19
Steven Pietkiewicz
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Power Products
Shares1,750
Max PriceUS$120.16
SellUS$1,200,07220 Dec 19
Raymond Stata
EntityIndividual
Role
Chairman of the Board
Founder & Chairman
Shares10,000
Max PriceUS$120.01
SellUS$370,33511 Oct 19
Steven Pietkiewicz
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Power Products
Shares3,419
Max PriceUS$108.32
SellUS$1,238,93816 Sep 19
Joseph Hassett
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Industrial & Consumer
Shares10,621
Max PriceUS$116.65
SellUS$160,56430 Aug 19
Prashanth Mahendra-Rajah
EntityIndividual
Role
Chief Financial Officer
Senior VP of Finance & CFO
Shares1,463
Max PriceUS$109.75
SellUS$815,96429 Jun 19
Steven Pietkiewicz
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Power Products
Shares7,219
Max PriceUS$113.03
SellUS$171,67528 May 19
Yusuf Jamal
EntityIndividual
Shares1,748
Max PriceUS$98.66
SellUS$505,61122 Mar 19
Steven Pietkiewicz
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Power Products
Shares4,575
Max PriceUS$110.52
SellUS$1,662,19815 Mar 19
Vincent Roche
EntityIndividual
Role
Chief Executive Officer
President
Shares15,505
Max PriceUS$107.20
SellUS$2,153,52004 Mar 19
Raymond Stata
EntityIndividual
Role
Chairman of the Board
Founder & Chairman
Shares20,000
Max PriceUS$107.68
SellUS$2,146,68027 Feb 19
Raymond Stata
EntityIndividual
Role
Chairman of the Board
Founder & Chairman
Shares20,000
Max PriceUS$107.33
SellUS$1,075,40025 Feb 19
Raymond Stata
EntityIndividual
Role
Chairman of the Board
Founder & Chairman
Shares10,000
Max PriceUS$107.54
SellUS$270,98725 Feb 19
Prashanth Mahendra-Rajah
EntityIndividual
Role
Chief Financial Officer
Senior VP of Finance & CFO
Shares2,556
Max PriceUS$106.02
SellUS$1,056,03025 Feb 19
Margaret Seif
EntityIndividual
Shares10,000
Max PriceUS$105.60

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Ray Stata (85yo)

    Founder & Chairman

    • Tenure: 47yrs
    • Compensation: US$462.55k
  • Vince Roche (59yo)

    President

    • Tenure: 6.7yrs
    • Compensation: US$11.01m
  • John Hassett (61yo)

    Senior Vice President of Industrial & Consumer

    • Tenure: 0.08yrs
    • Compensation: US$2.92m
  • Steve Pietkiewicz (59yo)

    Senior Vice President of Power Products

    • Tenure: 2.6yrs
    • Compensation: US$3.37m
  • Mike Lucarelli

    Director of Investor Relations

    • Dan Leibholz

      Chief Technology Officer

      • Tenure: 0.8yrs
    • Steve Lattari

      Senior Vice President of Global Operations & Technology

      • Tenure: 0.08yrs
    • Martin Cotter (54yo)

      Senior Vice President of Worldwide Sales & Digital Marketing

      • Tenure: 3.3yrs
      • Compensation: US$2.88m
    • Prashanth Mahendra-Rajah (49yo)

      Senior VP of Finance & CFO

      • Tenure: 2.3yrs
      • Compensation: US$3.98m
    • Michael Sondel (42yo)

      Chief Accounting Officer

      • Tenure: 0.9yrs

    Board Members

    • Bruce Evans (60yo)

      Independent Director

      • Tenure: 4.6yrs
      • Compensation: US$278.67k
    • Ray Stata (85yo)

      Founder & Chairman

      • Tenure: 47yrs
      • Compensation: US$462.55k
    • Neil Novich (64yo)

      Independent Director

      • Tenure: 11.7yrs
      • Compensation: US$288.67k
    • James Champy (76yo)

      Presiding Director

      • Compensation: US$303.67k
    • Vince Roche (59yo)

      President

      • Tenure: 6.7yrs
      • Compensation: US$11.01m
    • Kenton Sicchitano (75yo)

      Independent Director

      • Tenure: 16.8yrs
      • Compensation: US$293.67k
    • Ed Frank (63yo)

      Independent Director

      • Tenure: 5.6yrs
      • Compensation: US$281.17k
    • Lisa Su (49yo)

      Independent Director

      • Tenure: 7.6yrs
      • Compensation: US$276.17k
    • Mark Little (66yo)

      Independent Director

      • Tenure: 3yrs
      • Compensation: US$278.67k
    • Karen Golz (64yo)

      Independent Director

      • Tenure: 1.6yrs
      • Compensation: US$175.66k

    Company Information

    Analog Devices, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Analog Devices, Inc.
    • Ticker: ADI
    • Exchange: NasdaqGS
    • Founded: 1965
    • Industry: Semiconductors
    • Sector: Semiconductors
    • Market Cap: US$44.001b
    • Shares outstanding: 368.30m
    • Website: https://www.analog.com

    Number of Employees


    Location

    • Analog Devices, Inc.
    • One Technology Way
    • PO Box 9106
    • Norwood
    • Massachusetts
    • 2062
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    ADINasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1969
    ANLDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969
    ANLXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1969
    ADIWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1969
    0HFNLSE (London Stock Exchange)YesCommon StockGBUSDJan 1969
    ANLETLX (Eurotlx)YesCommon StockITEURJan 1969
    ADI *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1969
    A1DI34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 2 COMBRBRLDec 2019

    Biography

    Analog Devices, Inc. designs, manufactures, and markets integrated circuits (ICs), algorithms, software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. The company offers data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; high-performance amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure. It also provides power management and reference products for power management and conversion applications in the automotive, communications, industrial, and high-end consumer markets; and microelectromechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes to sense rotation, and inertial measurement units to sense multiple degrees of freedom. In addition, the company offers isolators for various applications, such as universal serial bus isolation in patient monitors; and smart metering and satellite applications, as well as digital signal processing products for high-speed numeric calculations. The company serves clients in industrial, automotive, consumer, and communications markets through a direct sales force, third-party distributors, and independent sales representatives in the United States, the rest of North and South America, Europe, Japan, China, and the rest of Asia, as well as through its Website. Analog Devices, Inc. was founded in 1965 and is headquartered in Norwood, Massachusetts. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/18 23:31
    End of Day Share Price2020/01/17 00:00
    Earnings2019/11/02
    Annual Earnings2019/11/02


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.