Contrasting Analog Devices (NASDAQ:ADI) and Dialog Semiconductor (OTCMKTS:DLGNF)

Analog Devices (NASDAQ:ADI) and Dialog Semiconductor (OTCMKTS:DLGNF) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Analog Devices	20.45%	10.74%	7.82%
Dialog Semiconductor	5.72%	16.55%	13.08%

Analyst Ratings

This is a summary of current ratings and price targets for Analog Devices and Dialog Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Analog Devices	0	6	18	0	2.75
Dialog Semiconductor	0	0	0	0	N/A

Analog Devices presently has a consensus target price of $245.50, suggesting a potential upside of 2.27%. Given Analog Devices’ higher possible upside, analysts plainly believe Analog Devices is more favorable than Dialog Semiconductor.

Volatility and Risk

Analog Devices has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Dialog Semiconductor has a beta of 1.74, suggesting that its stock price is 74% more volatile than the S&P 500.

Insider and Institutional Ownership

86.8% of Analog Devices shares are held by institutional investors. 0.3% of Analog Devices shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Analog Devices and Dialog Semiconductor’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Analog Devices	$12.31 billion	9.68	$3.31 billion	$4.28	56.08
Dialog Semiconductor	$1.38 billion	4.17	$84.50 million	$3.32	24.22

Analog Devices has higher revenue and earnings than Dialog Semiconductor. Dialog Semiconductor 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 Dialog Semiconductor on 10 of the 13 factors compared between the two stocks.

About Analog Devices

Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia. The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and consumer markets; and power ICs that include performance, integration, and software design simulation tools for accurate power supply designs. It also offers amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and micro-electro-mechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators. In addition, the company provides digital signal processing and system products for numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, defense and healthcare, and communications markets through a direct sales force, third-party distributors, and independent sales representatives, as well as online. Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.

About Dialog Semiconductor

Dialog Semiconductor Plc engages in the design, development, and marketing of integrated circuit (IC) products. It operates through the following segments: Custom Mixed Signal (CMS), Advanced Mixed Signal (AMS), Connectivity and Audio (C&A), and Industrial IoT. The CMS segment provides custom ICs designed to meet the needs of the customers in the mobile, industrial, automotive, computing and storage markets. The AMS segment offers standard products including CMICs, AC/DC converter solutions for smaller, fast charging power adaptors for portable devices as well as LED drivers for backlighting and solid state lighting products. The C&A segment includes standard products incorporating short-range wireless, digital cordless, Bluetooth low energy, VoIP, and low-power Wi-Fi technologies. The Industrial IoT segment consists of products enabling smart factory and building automation including non-volatile memory (NVM) ICs, industrial communication ICs, custom-designed ASICs and embedded systems, servers, and software. The company was founded in 1990 and is headquartered in Reading, the United Kingdom.