ANALOG DEVICES INC (ADI) Stock Fundamental Analysis
NASDAQ:ADI - Nasdaq - US0326541051 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to ADI. ADI was compared to 109 industry peers in the Semiconductors & Semiconductor Equipment industry. ADI has an average financial health and profitability rating. While showing a medium growth rate, ADI is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year ADI was profitable.
ADI had a positive operating cash flow in the past year.
ADI had positive earnings in each of the past 5 years.
Each year in the past 5 years ADI had a positive operating cash flow.
1.2 Ratios
ADI has a Return On Assets (3.26%) which is comparable to the rest of the industry.
ADI's Return On Equity of 4.46% is in line compared to the rest of the industry. ADI outperforms 55.96% of its industry peers.
The Return On Invested Capital of ADI (4.03%) is better than 61.47% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADI is below the industry average of 11.14%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.26% | ||
| ROE | 4.46% | ||
| ROIC | 4.03% |
ROA(3y)5.22%
ROA(5y)4.8%
ROE(3y)7.17%
ROE(5y)7.07%
ROIC(3y)6.33%
ROIC(5y)5.91%
1.3 Margins
ADI has a better Profit Margin (16.75%) than 75.23% of its industry peers.
ADI's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 21.67%, ADI belongs to the best of the industry, outperforming 81.65% of the companies in the same industry.
ADI's Operating Margin has declined in the last couple of years.
ADI's Gross Margin of 57.16% is fine compared to the rest of the industry. ADI outperforms 79.82% of its industry peers.
In the last couple of years the Gross Margin of ADI has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.67% | ||
| PM (TTM) | 16.75% | ||
| GM | 57.16% |
OM growth 3Y-5.6%
OM growth 5Y-6.15%
PM growth 3Y-2.98%
PM growth 5Y-5.24%
GM growth 3Y-2.63%
GM growth 5Y-3.15%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ADI is destroying value.
Compared to 1 year ago, ADI has about the same amount of shares outstanding.
ADI has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ADI has a worse debt to assets ratio.
2.2 Solvency
ADI has an Altman-Z score of 4.77. This indicates that ADI is financially healthy and has little risk of bankruptcy at the moment.
ADI's Altman-Z score of 4.77 is fine compared to the rest of the industry. ADI outperforms 62.39% of its industry peers.
The Debt to FCF ratio of ADI is 2.38, which is a good value as it means it would take ADI, 2.38 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.38, ADI is in the better half of the industry, outperforming 70.64% of the companies in the same industry.
ADI has a Debt/Equity ratio of 0.20. This is a healthy value indicating a solid balance between debt and equity.
ADI has a Debt to Equity ratio (0.20) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 2.38 | ||
| Altman-Z | 4.77 |
ROIC/WACC0.37
WACC10.89%
2.3 Liquidity
A Current Ratio of 1.93 indicates that ADI should not have too much problems paying its short term obligations.
ADI has a Current ratio of 1.93. This is in the lower half of the industry: ADI underperforms 75.23% of its industry peers.
A Quick Ratio of 1.43 indicates that ADI should not have too much problems paying its short term obligations.
ADI's Quick ratio of 1.43 is on the low side compared to the rest of the industry. ADI is outperformed by 72.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.93 | ||
| Quick Ratio | 1.43 |
3. Growth
3.1 Past
ADI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -30.68%.
The Earnings Per Share has been growing slightly by 4.42% on average over the past years.
The Revenue for ADI has decreased by -19.28% in the past year. This is quite bad
The Revenue has been growing by 9.49% on average over the past years. This is quite good.
EPS 1Y (TTM)-30.68%
EPS 3Y-0.26%
EPS 5Y4.42%
EPS Q2Q%-5.78%
Revenue 1Y (TTM)-19.28%
Revenue growth 3Y8.81%
Revenue growth 5Y9.49%
Sales Q2Q%-3.56%
3.2 Future
The Earnings Per Share is expected to grow by 19.94% on average over the next years. This is quite good.
Based on estimates for the next years, ADI will show a quite strong growth in Revenue. The Revenue will grow by 11.79% on average per year.
EPS Next Y13.38%
EPS Next 2Y17.99%
EPS Next 3Y18.8%
EPS Next 5Y19.94%
Revenue Next Year9.92%
Revenue Next 2Y11.37%
Revenue Next 3Y11.09%
Revenue Next 5Y11.79%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
ADI is valuated quite expensively with a Price/Earnings ratio of 28.07.
ADI's Price/Earnings is on the same level as the industry average.
ADI is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 19.85, ADI is valued on the expensive side.
Based on the Price/Forward Earnings ratio, ADI is valued a bit cheaper than 66.97% of the companies in the same industry.
ADI's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.07 | ||
| Fwd PE | 19.85 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ADI.
70.64% of the companies in the same industry are more expensive than ADI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.46 | ||
| EV/EBITDA | 22.09 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ADI's earnings are expected to grow with 18.80% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.1
PEG (5Y)6.35
EPS Next 2Y17.99%
EPS Next 3Y18.8%
5. Dividend
5.1 Amount
ADI has a Yearly Dividend Yield of 2.25%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.99, ADI pays a better dividend. On top of this ADI pays more dividend than 88.07% of the companies listed in the same industry.
ADI's Dividend Yield is comparable with the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
5.2 History
The dividend of ADI is nicely growing with an annual growth rate of 11.42%!
ADI has been paying a dividend for at least 10 years, so it has a reliable track record.
ADI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.42%
Div Incr Years20
Div Non Decr Years20
5.3 Sustainability
ADI pays out 116.74% of its income as dividend. This is not a sustainable payout ratio.
ADI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP116.74%
EPS Next 2Y17.99%
EPS Next 3Y18.8%
176.27
+0.34 (+0.19%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners92.49%
Inst Owner Change0.59%
Ins Owners0.03%
Ins Owner Change7.74%
Market Cap87.43B
Analysts78.89
Price Target263.68 (49.59%)
Short Float %1.57%
Short Ratio2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
Yearly Dividend3.62
Dividend Growth(5Y)11.42%
DP116.74%
Div Incr Years20
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.81%
Min EPS beat(2)1.02%
Max EPS beat(2)4.61%
EPS beat(4)4
Avg EPS beat(4)4.79%
Min EPS beat(4)1.02%
Max EPS beat(4)9.63%
EPS beat(8)6
Avg EPS beat(8)2.34%
EPS beat(12)10
Avg EPS beat(12)3.63%
EPS beat(16)14
Avg EPS beat(16)3.91%
Revenue beat(2)2
Avg Revenue beat(2)1.05%
Min Revenue beat(2)0.46%
Max Revenue beat(2)1.64%
Revenue beat(4)4
Avg Revenue beat(4)1.07%
Min Revenue beat(4)0.46%
Max Revenue beat(4)1.64%
Revenue beat(8)5
Avg Revenue beat(8)0.31%
Revenue beat(12)9
Avg Revenue beat(12)0.91%
Revenue beat(16)13
Avg Revenue beat(16)1.08%
PT rev (1m)0.13%
PT rev (3m)2.62%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)-0.32%
EPS NY rev (1m)0.8%
EPS NY rev (3m)0.8%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)1.65%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.07 | ||
| Fwd PE | 19.85 | ||
| P/S | 9.36 | ||
| P/FCF | 27.46 | ||
| P/OCF | 22.76 | ||
| P/B | 2.49 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.09 |
EPS(TTM)6.28
EY3.56%
EPS(NY)8.88
Fwd EY5.04%
FCF(TTM)6.42
FCFY3.64%
OCF(TTM)7.74
OCFY4.39%
SpS18.83
BVpS70.71
TBVpS-2.13
PEG (NY)2.1
PEG (5Y)6.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.26% | ||
| ROE | 4.46% | ||
| ROCE | 4.5% | ||
| ROIC | 4.03% | ||
| ROICexc | 4.28% | ||
| ROICexgc | 27.41% | ||
| OM | 21.67% | ||
| PM (TTM) | 16.75% | ||
| GM | 57.16% | ||
| FCFM | 34.1% |
ROA(3y)5.22%
ROA(5y)4.8%
ROE(3y)7.17%
ROE(5y)7.07%
ROIC(3y)6.33%
ROIC(5y)5.91%
ROICexc(3y)6.53%
ROICexc(5y)6.17%
ROICexgc(3y)44.45%
ROICexgc(5y)45.96%
ROCE(3y)7.03%
ROCE(5y)6.55%
ROICexcg growth 3Y-18.89%
ROICexcg growth 5Y-14.51%
ROICexc growth 3Y4.4%
ROICexc growth 5Y-12.69%
OM growth 3Y-5.6%
OM growth 5Y-6.15%
PM growth 3Y-2.98%
PM growth 5Y-5.24%
GM growth 3Y-2.63%
GM growth 5Y-3.15%
F-Score5
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 2.38 | ||
| Debt/EBITDA | 1.74 | ||
| Cap/Depr | 31.34% | ||
| Cap/Sales | 7.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 93.27% | ||
| Profit Quality | 203.6% | ||
| Current Ratio | 1.93 | ||
| Quick Ratio | 1.43 | ||
| Altman-Z | 4.77 |
F-Score5
WACC10.89%
ROIC/WACC0.37
Cap/Depr(3y)40.05%
Cap/Depr(5y)34.52%
Cap/Sales(3y)7.94%
Cap/Sales(5y)6.29%
Profit Quality(3y)145.19%
Profit Quality(5y)151.71%
High Growth Momentum
Growth
EPS 1Y (TTM)-30.68%
EPS 3Y-0.26%
EPS 5Y4.42%
EPS Q2Q%-5.78%
EPS Next Y13.38%
EPS Next 2Y17.99%
EPS Next 3Y18.8%
EPS Next 5Y19.94%
Revenue 1Y (TTM)-19.28%
Revenue growth 3Y8.81%
Revenue growth 5Y9.49%
Sales Q2Q%-3.56%
Revenue Next Year9.92%
Revenue Next 2Y11.37%
Revenue Next 3Y11.09%
Revenue Next 5Y11.79%
EBIT growth 1Y-41.44%
EBIT growth 3Y2.72%
EBIT growth 5Y2.76%
EBIT Next Year46.87%
EBIT Next 3Y21.09%
EBIT Next 5Y18.97%
FCF growth 1Y-25.27%
FCF growth 3Y9.29%
FCF growth 5Y9.56%
OCF growth 1Y-23.58%
OCF growth 3Y12.1%
OCF growth 5Y11.33%