Analog Devices (NASDAQ: ADI) and Silicon Motion Technology Corporation (NASDAQ:SIMO) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Analog Devices and Silicon Motion Technology Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Analog Devices 0 9 17 0 2.65
Silicon Motion Technology Corporation 0 3 10 0 2.77

Analog Devices presently has a consensus target price of $93.83, indicating a potential upside of 4.41%. Silicon Motion Technology Corporation has a consensus target price of $57.67, indicating a potential upside of 15.43%. Given Silicon Motion Technology Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Silicon Motion Technology Corporation is more favorable than Analog Devices.

Profitability

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

Net Margins Return on Equity Return on Assets
Analog Devices 14.77% 19.06% 8.78%
Silicon Motion Technology Corporation 18.91% 24.24% 17.85%

Dividends

Analog Devices pays an annual dividend of $1.80 per share and has a dividend yield of 2.0%. Silicon Motion Technology Corporation pays an annual dividend of $0.79 per share and has a dividend yield of 1.6%. Analog Devices pays out 86.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Silicon Motion Technology Corporation pays out 26.6% of its earnings in the form of a dividend.

Risk and Volatility

Analog Devices has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Silicon Motion Technology Corporation has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Institutional & Insider Ownership

86.6% of Analog Devices shares are held by institutional investors. Comparatively, 79.4% of Silicon Motion Technology Corporation shares are held by institutional investors. 1.1% of Analog Devices shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Analog Devices and Silicon Motion Technology Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Analog Devices $4.57 billion 7.23 $1.83 billion $2.09 43.00
Silicon Motion Technology Corporation $562.80 million 3.17 $145.81 million $2.97 16.82

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

Summary

Analog Devices beats Silicon Motion Technology Corporation on 9 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 Silicon Motion Technology Corporation

Silicon Motion Technology Corporation is a fabless semiconductor company. The Company designs, develops and markets low-power semiconductor solutions to original equipment manufacturers (OEMs) and other customers in the mobile storage and mobile communications markets. It is engaged in developing negative-AND (NAND) flash controller integrated circuits (ICs) for solid-state storage devices and specialty radio frequency (RF) ICs for mobile devices. In the mobile storage market, the Company’s products are controllers used in embedded storage products, such as Solid State Drives (SSDs), and Embedded Multimedia Cards (eMMCs), as well as expandable storage products, such as flash memory cards and universal serial bus (USB) flash drives. For the mobile communications market, the Company’s products are handset transceivers and mobile television (TV) System on Chips (SoCs). The Company’s products are used in devices, such as smartphones, tablets and personal computers (PCs).

Receive News & Ratings for Analog Devices Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Analog Devices Inc. and related companies with MarketBeat.com's FREE daily email newsletter.