Analog Devices
Analog Devices (ADI:NASDAQ) designs and manufactures high performance integrated circuits (ICs), software and systems that leverage analog, mixed & digital signal processing technologies as well as power solutions They have an incredible 59 years of experience.
The company is a leader in the semiconductor industry helping bridge the gap between the physical & digital worlds. It’s technologies drive advancements in factories helping digitise industries. ADI also assist in mobility and the Health Care sectors.
In layman’s terms ADI’s products convert signals like: Audio, light, speed, pressure & motion into binary code: 010010101010
Physical world —————————————————————————— Cyber World
Total 2024 revenue came in at £9+ billion splits across these various sectors:
- B2B 87%
- Industrial 46%
- Automotive 30%
- Communications 11%
- Consumer 13%
The company claims that 25% of its products are aligned with high growth markets fuelled by increasing digitisation and sustainability goals.
Edge computing offers unparalleled safety and speed and is set to grow from 10% now to 75% by 2025. Applications included AR/VR, the meta-verse and autonomous driving.
What I like about ADI is that their production is not all in one place, its spread across four foundries, Beaverton USA, Limerick Ireland, Taiwan & Japan.
Over their 58 years they have built relationships with 125,000 customer. Please see the image below for a quick snapshot of their success as a leading suppliers to industry:
Analog Devices average five year share price
ADI’s average share price over the past five years (08/2019 to 08/2024) for Analog Devices (ADI) sits between:
The lowest point of $79.08 on the 22nd March 2020, at the start of the pandemic.
To the highest of $244.14 on the 21st July 2024.
Based on my own personal experience looking at a long term hold, I would be looking to purchase additional shares between $160.57 to $182.50 price target.
The exit strategy would to hold for 10-15 years selling between $350 to $400 dollars.
Analog Devices Dividend
Analog devices distributes a quarterly dividend paid in the months of March, June, Sept & December.
Dividends have grown for 20 straight years targeting 40%-60% (FCF) of Free Cash Flow.
Over the past 10 years total return to shareholders is 350%.
Any excess cashflow is allocated towards share repurchases and shares were reduced by nearly 4% during 2022.
Cash returned to shareholders over the last five years equates to $16 Billion Dollars.
ADI’s debt is low at <1.0x as of Q4 2022.
I added ADI’s shares to the portfolio in May 2023 and wished I had only added this particular stock earlier for all the above reasons.
ADI is a well run profitable business I like, therefore on any market pull back where I have sufficient funds available, this will be one equity I will be increasing all the way to 100 shares.
If you would like to discover more, you can go directly to the ADI website by clicking here.
The most recent dividend declared was $0.92 cents in December 2024 (Ex Dividend 09.12.24).
Total dividends for 2024 was $3.68.
For research purposes I have listed the past eleven years of annual dividends below:
2024 $3.68
2023 $3.44
2022 $3.04
2021 $2.76
2020 $2.48
2019 $2.16
2018 $1.92
2017 $1.80
2016 $1.68
2015 $1.60
2014 $1.48
Fundamentals:
P/E: 64.98 (31/12/24)
Forward P/E: 29.95 (19/09/24)
Dividend Yield: 1.73% (31/12/24)
The seventh dividend of £29.09 was received on 24th December 2024, making the total income generated to date £167.90.
To see how ADI dividends affects the total 2024 income, please click here
Further dividend analysis can be viewed in the file below:
ADI
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