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 58 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 2022 revenue came in at £12 billion splits across these various sectors:
- B2B 87%
- Industrial 51%
- Automotive 21%
- Communications 16%
- Consumer 13%
The company is claiming 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
The 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
I added ADI’s shares to the portfolio in May 2023 and regret not adding this particular stock earlier for the following Reasons:
ADI’s debt is low at <1.0x as of Q4 2022.
Dividends have grown for 19 straight years targeting 40%-60% (FCF) of Free Cash Flow.
Analog devices distributes a quarterly dividend paid in the months of: March, June, Sept & December.
Any excess cashflow is allocated towards share repurchases and shares were reduced by nearly 4% during 2022.
Over the past 10 years total return to shareholders is 350%.
Cash returned to shareholders over the last 10 years equates to $15 Billion Dollars.
The most recent dividend declared was $0.92 cents in June 2024 (Ex Dividend 04.06.24).
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.
P/E: 56.07 (20/06/24)
Forward P/E: 37.86 (20/06/24)
Dividend Yield: 1.59% (20/06/24)
The fifth dividend of £28.68 was received in June 2024, taking the total income to date to £111.32.
Further dividend analysis can be viewed in the file below:
ADI
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