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
Analog devices distributes a quarterly dividend paid in the months of March, June, Sept & December.
Dividends have grown for 19 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 10 years equates to $15 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 Sept 2024 (Ex Dividend 03.09.24).
Total dividends for 2024 thus far is $2.76 with one remaining Q4 to follow.
For research purposes I have listed the past ten years of the total annual dividends paid out:
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: 71.39 (19/09/24)
Forward P/E: 32.59 (19/09/24)
Dividend Yield: 1.63% (19/09/24)
The fifth dividend of £28.68 was received in Sept 2024, taking the total income to date to £138.81.
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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