Analog Devices (ADI) vs. Diodes (DIOD) Financial Review

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Analog Devices (NASDAQ:ADI) and Diodes (NASDAQ:DIOD) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Earnings & Valuation

This table compares Analog Devices and Diodes’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Analog Devices $6.20 billion 6.54 $1.50 billion $5.94 18.55
Diodes $1.21 billion 1.61 $104.02 million $2.38 15.85

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

Insider and Institutional Ownership

90.2% of Analog Devices shares are held by institutional investors. Comparatively, 78.2% of Diodes shares are held by institutional investors. 0.5% of Analog Devices shares are held by company insiders. Comparatively, 6.7% of Diodes shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Analog Devices has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Diodes has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Dividends

Analog Devices pays an annual dividend of $2.16 per share and has a dividend yield of 2.0%. Diodes does not pay a dividend. Analog Devices pays out 36.4% of its earnings in the form of a dividend. Analog Devices has increased its dividend for 9 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for Analog Devices and Diodes, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Analog Devices 1 9 12 0 2.50
Diodes 0 1 2 0 2.67

Analog Devices currently has a consensus price target of $102.85, indicating a potential downside of 6.65%. Diodes has a consensus price target of $40.00, indicating a potential upside of 6.02%. Given Diodes’ stronger consensus rating and higher probable upside, analysts clearly believe Diodes is more favorable than Analog Devices.

Profitability

This table compares Analog Devices and Diodes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Analog Devices 25.42% 19.99% 10.52%
Diodes 8.57% 12.89% 8.22%

Summary

Analog Devices beats Diodes on 13 of the 17 factors compared between the two stocks.

About Analog Devices

Analog Devices, Inc. engages in the design, development, manufacture, and marketing of integrated circuits (ICs). Its products include industrial process control systems, medical imaging equipment, factory process automation systems, patient vital signs monitoring devices, instrumentation and measurement systems, wireless infrastructure equipment, energy management systems, networking equipment, aerospace and defense electronics, optical systems, automobiles, and portable consumer devices. The company was founded by Raymond P. Stata and Matthew Lorber in 1965 and is headquartered in Norwood, MA.

About Diodes

Diodes Incorporated, together with its subsidiaries, designs, manufactures, and supplies application-specific standard products in the discrete, logic, and analog and mixed semiconductor markets in Asia, North America, Europe, and internationally. It primarily focuses on low pin count semiconductor devices with one or more active or passive components. The company offers discrete semiconductor products, such as performance Schottky rectifiers and diodes; Zener diodes, including tight tolerance and low operating current type performance Zener diodes; standard, fast, super-fast, and ultra-fast recovery rectifiers; bridge rectifiers; switching diodes; small signal bipolar and pre-biased transistors; MOSFETs; thyristor surge protection devices; and transient voltage suppressors. It also provides analog products comprising power management devices consisting of AC-DC and DC-DC converters, USB power switches, and low dropout and linear voltage regulators; linear devices, such as operational amplifiers and comparators, current monitors, voltage references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products, including hall-effect sensors and motor drivers. In addition, the company offers standard logic products comprising low-voltage complementary metal–oxide–semiconductor (CMOS) and high-speed CMOS devices; ultra-low power CMOS logic products and analog switches; multichip products and co-packaged discrete, analog, and mixed-signal silicon in miniature packages; silicon and silicon epitaxial wafers; and crystals and oscillators. It sells its products to the consumer electronics, computing, communications, industrial, and automotive markets through direct sales and marketing personnel, independent sales representatives, and distributors. Diodes Incorporated was founded in 1959 and is headquartered in Plano, Texas.

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