Contrasting Maxim Integrated Products (NASDAQ:MXIM) and Analog Devices (NASDAQ:ADI)

Maxim Integrated Products (NASDAQ:MXIM) and Analog Devices (NASDAQ:ADI) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.

Volatility and Risk

Maxim Integrated Products has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Analog Devices has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500.

Valuation and Earnings

This table compares Maxim Integrated Products and Analog Devices’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Maxim Integrated Products $2.31 billion 6.76 $827.49 million $2.43 23.77
Analog Devices $6.20 billion 6.52 $1.50 billion $5.94 18.43

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

Institutional and Insider Ownership

92.5% of Maxim Integrated Products shares are owned by institutional investors. Comparatively, 87.5% of Analog Devices shares are owned by institutional investors. 0.8% of Maxim Integrated Products shares are owned by insiders. Comparatively, 0.5% of Analog Devices shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Maxim Integrated Products and Analog Devices’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Maxim Integrated Products 35.76% 37.75% 16.94%
Analog Devices 24.71% 17.87% 9.62%

Dividends

Maxim Integrated Products pays an annual dividend of $1.92 per share and has a dividend yield of 3.3%. Analog Devices pays an annual dividend of $2.16 per share and has a dividend yield of 2.0%. Maxim Integrated Products pays out 79.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Analog Devices pays out 36.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and target prices for Maxim Integrated Products and Analog Devices, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Maxim Integrated Products 2 8 4 0 2.14
Analog Devices 0 3 12 0 2.80

Maxim Integrated Products presently has a consensus price target of $60.43, indicating a potential upside of 4.64%. Analog Devices has a consensus price target of $114.33, indicating a potential upside of 4.43%. Given Maxim Integrated Products’ higher probable upside, equities analysts clearly believe Maxim Integrated Products is more favorable than Analog Devices.

Summary

Maxim Integrated Products beats Analog Devices on 9 of the 16 factors compared between the two stocks.

Maxim Integrated Products Company Profile

Maxim Integrated Products, Inc. designs, develops, manufactures, and markets a range of linear and mixed-signal integrated circuits in the United States, China, the rest of Asia, Europe, and internationally. The company also provides a range of high-frequency process technologies and capabilities for use in custom designs. It serves automotive, communications and data center, computing, consumer, and industrial markets. The company markets its products through a direct-sales and applications organization, as well as through its own and other unaffiliated distribution channels. Maxim Integrated Products, Inc. was founded in 1983 and is headquartered in San Jose, California.

Analog Devices Company Profile

Analog Devices, Inc. engages in the design, development, manufacture, and marketing of integrated circuits (ICs). Its products include industrial process control systems, medical imaging equipment, factory process automation systems, patient vital signs monitoring devices, instrumentation and measurement systems, wireless infrastructure equipment, energy management systems, networking equipment, aerospace and defense electronics, optical systems, automobiles, and portable consumer devices. The company was founded by Raymond P. Stata and Matthew Lorber in 1965 and is headquartered in Norwood, MA.

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