Canadian Solar (NASDAQ:CSIQ) and Analog Devices (NASDAQ:ADI) Financial Review

Canadian Solar (NASDAQ:CSIQ) and Analog Devices (NASDAQ:ADI) are both oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Dividends

Analog Devices pays an annual dividend of $2.16 per share and has a dividend yield of 1.9%. Canadian Solar does not pay a dividend. Analog Devices pays out 36.4% of its earnings in the form of a dividend.

Risk & Volatility

Canadian Solar has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500. Comparatively, Analog Devices has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Profitability

This table compares Canadian Solar and Analog Devices’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Canadian Solar 6.77% 12.91% 3.32%
Analog Devices 24.71% 17.87% 9.62%

Earnings & Valuation

This table compares Canadian Solar and Analog Devices’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Canadian Solar $3.74 billion 0.24 $237.07 million $3.28 4.56
Analog Devices $6.20 billion 6.76 $1.50 billion $5.94 19.09

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

Insider & Institutional Ownership

41.7% of Canadian Solar shares are owned by institutional investors. Comparatively, 87.6% of Analog Devices shares are owned by institutional investors. 0.5% of Analog Devices shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Canadian Solar and Analog Devices, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Canadian Solar 0 3 3 0 2.50
Analog Devices 0 3 14 0 2.82

Canadian Solar presently has a consensus target price of $25.20, indicating a potential upside of 68.56%. Analog Devices has a consensus target price of $115.06, indicating a potential upside of 1.46%. Given Canadian Solar’s higher probable upside, equities analysts plainly believe Canadian Solar is more favorable than Analog Devices.

Summary

Analog Devices beats Canadian Solar on 13 of the 16 factors compared between the two stocks.

About Canadian Solar

Canadian Solar Inc., together with its subsidiaries, designs, develops, manufactures, and sells solar ingots, wafers, cells, modules, and other solar power products primarily under the Canadian Solar brand name. The company operates through two segments, Module and System Solutions, and Energy. Its products include various solar modules that are used in residential, commercial, and industrial solar power generation systems. The company also provides specialty solar products consisting of Andes Solar Home System, an off-grid solar system that provides an economical source of electricity to homes and communities without access to grid; and Maple Solar System, a clean energy solution for families, as well as solar system kits, which are a ready-to-install packages that consist inverters, racking systems, and other accessories. In addition, it develops, builds, and sells solar power projects; performs engineering, procurement, and construction (EPC) work for solar power projects; and offers operation and maintenance services that include inspection, repair, and replacement of plant equipment, site management, and administrative support services. Further, the company generates and sells electricity through its solar plants with an aggregate capacity of approximately 1,211.1 megawatts. Canadian Solar Inc. offers its products to distributors, system integrators, project developers, and installers/EPC companies. The company has operations in North America, South America, Europe, Africa, the Middle East, Australia, and Asia. Canadian Solar Inc. was founded in 2001 and is based in Guelph, Canada.

About Analog Devices

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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