How to buy Analog Devices shares

Is it a good time to buy Analog Devices stock?

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Is Analog Devices under- or over-valued?

Valuing Analog Devices stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Analog Devices’s overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.

Analog Devices’s P/E ratio

Analog Devices’s current share price divided by its per-share earnings (EPS) over a 12-month period gives a “trailing price/earnings ratio” of roughly 40x. In other words, Analog Devices shares trade at around 40x recent earnings.

That’s relatively high compared to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they’re over-valued.

Analog Devices’s PEG ratio

Analog Devices’s “price/earnings-to-growth ratio” can be calculated by dividing its P/E ratio by its growth – to give 2.1399. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.

The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Analog Devices’s future profitability. By accounting for growth, it could also help you if you’re comparing the share prices of multiple high-growth companies.

Analog Devices’s EBITDA

Analog Devices’s EBITDA (earnings before interest, taxes, depreciation and amortisation) is US$2.6 billion (£1.9 billion).

The EBITDA is a measure of a Analog Devices’s overall financial performance and is widely used to measure a its profitability.

Shorting Analog Devices shares

There are currently 35.3 million Analog Devices shares held short by investors – that’s known as Analog Devices’s “short interest”. This figure is 10.5% up from 31.9 million last month.

There are a few different ways that this level of interest in shorting Analog Devices shares can be evaluated.

Analog Devices’s “short interest ratio” (SIR)

Analog Devices’s “short interest ratio” (SIR) is the quantity of Analog Devices shares currently shorted divided by the average quantity of Analog Devices shares traded daily (recently around 3.1 million). Analog Devices’s SIR currently stands at 11.38. In other words for every 100,000 Analog Devices shares traded daily on the market, roughly 11380 shares are currently held short.

However Analog Devices’s short interest can also be evaluated against the total number of Analog Devices shares, or, against the total number of tradable Analog Devices shares (the shares that aren’t held by “insiders” or major long-term shareholders – also known as the “float”). In this case Analog Devices’s short interest could be expressed as 0.1% of the outstanding shares (for every 100,000 Analog Devices shares in existence, roughly 100 shares are currently held short) or 0.0958% of the tradable shares (for every 100,000 tradable Analog Devices shares, roughly 96 shares are currently held short).

A SIR above 10% would generally be considered pretty high, pointing to a potentially pessimistic outlook for the share price and a discouraging interest in betting against Analog Devices.

Find out more about how you can short Analog Devices stock.

Analog Devices’s environmental, social and governance track record

Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Analog Devices.

When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.

Analog Devices’s total ESG risk score

Total ESG risk: 31.67

Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Analog Devices’s overall score of 31.67 (as at 12/31/2018) is nothing to write home about – landing it in it in the 51st percentile of companies rated in the same sector.

ESG scores are increasingly used to estimate the level of risk a company like Analog Devices is exposed to within the areas of “environmental” (carbon footprint, resource use etc.), “social” (health and safety, human rights etc.), and “governance” (anti-corruption, tax transparency etc.).

Analog Devices’s environmental score

Environmental score: 18.43/100

Analog Devices’s environmental score of 18.43 puts it squarely in the 9th percentile of companies rated in the same sector. This could suggest that Analog Devices is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.

Analog Devices’s social score

Social score: 14.15/100

Analog Devices’s social score of 14.15 puts it squarely in the 9th percentile of companies rated in the same sector. This could suggest that Analog Devices is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.

Analog Devices’s governance score

Governance score: 12.09/100

Analog Devices’s governance score puts it squarely in the 9th percentile of companies rated in the same sector. That could suggest that Analog Devices is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.

Analog Devices share dividends

Dividend payout ratio: 47.93% of net profits

Recently Analog Devices has paid out, on average, around 47.93% of net profits as dividends. That has enabled analysts to estimate a “forward annual dividend yield” of 1.83% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Analog Devices shareholders could enjoy a 1.83% return on their shares, in the form of dividend payments. In Analog Devices’s case, that would currently equate to about $2.55 per share.

While Analog Devices’s payout ratio might seem fairly standard, it’s worth remembering that Analog Devices may be investing much of the rest of its net profits in future growth.

Analog Devices’s most recent dividend payout was on 8 March 2021. The latest dividend was paid out to all shareholders who bought their shares by 24 February 2021 (the “ex-dividend date”).

Have Analog Devices’s shares ever split?

Analog Devices’s shares were split on a 2:1 basis on 15 March 2000. So if you had owned 1 share the day before before the split, the next day you’d have owned 2 shares. This wouldn’t directly have changed the overall worth of your Analog Devices shares – just the quantity. However, indirectly, the new 50% lower share price could have impacted the market appetite for Analog Devices shares which in turn could have impacted Analog Devices’s share price.

Analog Devices share price volatility

Over the last 12 months, Analog Devices’s shares have ranged in value from as little as US$81.3177 up to US$163.6987. A popular way to gauge a stock’s volatility is its “beta”.

Beta is a measure of a share’s volatility in relation to the market. The market (NASDAQ average) beta is 1, while Analog Devices’s is 1.3218. This would suggest that Analog Devices’s shares are more volatile than the average for this exchange and represent, relatively-speaking, a higher risk (but potentially also market-beating returns).

Analog Devices overview

Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. The company offers data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; high-performance amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure. It also provides power management and reference products for power management and conversion applications in the automotive, communications, industrial, and high-end consumer markets; and microelectromechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes to sense rotation, and inertial measurement units to sense multiple degrees of freedom, as well as isolators. In addition, the company offers digital signal processing and system products for high-speed numeric calculations. The company serves clients in the industrial, automotive, consumer, and communications markets through a direct sales force, third-party distributors, and independent sales representatives in the United States, the rest of North and South America, Europe, Japan, China, and rest of Asia, as well as through its Website. Analog Devices, Inc. was founded in 1965 and is headquartered in Wilmington, Massachusetts.

Frequently asked questions

• 
  What percentage of Analog Devices is owned by insiders or institutions?
  
  

  Currently 0.318% of Analog Devices shares are held by insiders and 94.553% by institutions.

• 
  When does the fiscal year end for Analog Devices?
  
  

  Analog Devices’s fiscal year ends in October.

• 
  Where is Analog Devices based?
  
  

  Analog Devices’s address is: One Technology Way, Norwood, MA, United States, 02062

• 
  What is Analog Devices’s ISIN number?
  
  

  Analog Devices’s international securities identification number is: US0326541051

• 
  What is Analog Devices’s CUSIP number?
  
  

  Analog Devices’s Committee on Uniform Securities Identification Procedures number is: 032654105