Why ANALOG DEVICES INC (NASDAQ:ADI) qualifies as a quality stock.

In this article we will dive into ANALOG DEVICES INC (NASDAQ:ADI) as a possible candidate for quality investing. Investors should always do their own research, but we noticed ANALOG DEVICES INC showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

What matters for quality investors.

• Over the past 5 years, ANALOG DEVICES INC has experienced impressive revenue growth, with 14.6% increase. This demonstrates the company's ability to effectively expand its top line and suggests a positive outlook for future revenue generation.
• With a robust ROIC excluding cash and goodwill at 55.87%, ANALOG DEVICES INC showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
• ANALOG DEVICES INC maintains a healthy Debt/Free Cash Flow Ratio of 1.89, indicating a strong financial position and prudent debt management. This ratio suggests the company has sufficient free cash flow to cover its debt obligations and highlights its ability to generate cash from operations.
• With a favorable Profit Quality (5-year) ratio of 143.0%, ANALOG DEVICES INC showcases its ability to consistently deliver high-quality profits. This metric signifies the company's financial strength and its capacity to generate sustainable earnings over an extended period.
• ANALOG DEVICES INC has consistently achieved strong EBIT growth over the past 5 years, with a 15.23% increase. This underscores the company's effective management of its operating income and suggests a positive outlook for future profitability.
• ANALOG DEVICES INC demonstrates a remarkable trend where its EBIT 5-year growth exceeds its Revenue 5-year growth. This indicates the company's ability to enhance its profitability through improved cost control and operational efficiency.

How does the complete fundamental picture look for NASDAQ:ADI?

ChartMill utilizes a proprietary algorithm to assign a Fundamental Rating to every stock. This rating, ranging from 0 to 10, is computed daily by analyzing a variety of fundamental indicators and properties.

Overall ADI gets a fundamental rating of 6 out of 10. We evaluated ADI against 105 industry peers in the Semiconductors & Semiconductor Equipment industry. While ADI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ADI is not valued too expensively and it also shows a decent growth rate.

Check the latest full fundamental report of ADI for a complete fundamental analysis.

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.