Analog Devices (NASDAQ: ADI) and Semtech Corporation (NASDAQ:SMTC) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitabiliy, institutional ownership, valuation and earnings.

Institutional & Insider Ownership

87.8% of Analog Devices shares are owned by institutional investors. Comparatively, 94.0% of Semtech Corporation shares are owned by institutional investors. 1.1% of Analog Devices shares are owned by insiders. Comparatively, 2.2% of Semtech Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Analog Devices pays an annual dividend of $1.80 per share and has a dividend yield of 2.3%. Semtech Corporation does not pay a dividend. Analog Devices pays out 67.9% of its earnings in the form of a dividend.

Risk & Volatility

Analog Devices has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Semtech Corporation has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Analog Devices and Semtech Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Analog Devices 2 7 16 0 2.56
Semtech Corporation 0 1 6 0 2.86

Analog Devices presently has a consensus target price of $90.91, indicating a potential upside of 15.26%. Semtech Corporation has a consensus target price of $43.50, indicating a potential upside of 10.97%. Given Analog Devices’ higher possible upside, equities research analysts clearly believe Analog Devices is more favorable than Semtech Corporation.

Profitability

This table compares Analog Devices and Semtech Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Analog Devices 20.88% 19.39% 9.39%
Semtech Corporation 10.70% 12.16% 7.23%

Earnings and Valuation

This table compares Analog Devices and Semtech Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Analog Devices $4.01 billion 7.22 $1.55 billion $2.65 29.76
Semtech Corporation $556.93 million 4.63 $112.89 million $0.90 43.56

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

Summary

Analog Devices beats Semtech Corporation on 10 of the 16 factors compared between the two stocks.

About Analog Devices

Analog Devices, Inc. (Analog Devices) designs, manufactures and markets a portfolio of solutions that leverage high-performance analog, mixed-signal and digital signal processing technology, including integrated circuits (ICs), algorithms, software and subsystems. Its products include Analog Products, Converters, Amplifiers/Radio Frequency, Other Analog, Power Management and Reference, and Digital Signal Processing Products. The Company is a supplier of data converter products. The Company is a supplier of high-performance amplifiers. Its analog product line also includes products of high performance radio frequency (RF) ICs. The Company’s DSPs are used for high-speed numeric calculations. The Company offers its products for applications in various end markets, such as industrial, automotive, consumer and communications. The Company operates in the United States, Rest of North/South America, Europe, Japan and China.

About Semtech Corporation

Semtech Corporation is a supplier of analog and mixed-signal semiconductor products. The Company designs, develops and markets a range of products for commercial applications, which are sold into the enterprise computing, communications, consumer and industrial end-markets. Its product lines include Signal Integrity, Protection, Wireless and Sensing, and Power and High-Reliability. Applications for the industrial market include video broadcast studio equipment, automated meter reading, wireless charging, military and aerospace, medical, security systems, automotive, Internet of Things, industrial and home automation, and video security and surveillance. Enterprise computing end-markets include desktops, notebooks, servers, graphic boards, printers, datacenter related equipment and passive optical networks. Communications end-market applications include wireless base stations, carrier networks, switches and routers, cable modems, signal conditioners and wireless local area network.

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