Head to Head Comparison: Silicon Motion Technology Corporation (SIMO) vs. Analog Devices (ADI)

Silicon Motion Technology Corporation (NASDAQ: SIMO) and Analog Devices (NASDAQ:ADI) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Insider and Institutional Ownership

79.4% of Silicon Motion Technology Corporation shares are held by institutional investors. Comparatively, 86.7% of Analog Devices shares are held by institutional investors. 1.1% of Analog Devices shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Silicon Motion Technology Corporation has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Analog Devices has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Dividends

Silicon Motion Technology Corporation pays an annual dividend of $0.79 per share and has a dividend yield of 1.6%. Analog Devices pays an annual dividend of $1.80 per share and has a dividend yield of 2.0%. Silicon Motion Technology Corporation pays out 31.1% of its earnings in the form of a dividend. Analog Devices pays out 86.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Silicon Motion Technology Corporation and Analog Devices’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silicon Motion Technology Corporation 17.18% 20.07% 15.08%
Analog Devices 14.77% 19.06% 8.78%

Analyst Ratings

This is a summary of recent recommendations for Silicon Motion Technology Corporation and Analog Devices, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silicon Motion Technology Corporation 0 3 10 0 2.77
Analog Devices 0 9 17 0 2.65

Silicon Motion Technology Corporation currently has a consensus price target of $57.67, indicating a potential upside of 19.10%. Analog Devices has a consensus price target of $93.83, indicating a potential upside of 2.77%. Given Silicon Motion Technology Corporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe Silicon Motion Technology Corporation is more favorable than Analog Devices.

Valuation & Earnings

This table compares Silicon Motion Technology Corporation and Analog Devices’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Silicon Motion Technology Corporation $562.80 million 3.07 $145.81 million $2.54 19.06
Analog Devices $4.57 billion 7.35 $1.83 billion $2.09 43.68

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

Summary

Analog Devices beats Silicon Motion Technology Corporation on 9 of the 16 factors compared between the two stocks.

Silicon Motion Technology Corporation Company Profile

Silicon Motion Technology Corporation is a fabless semiconductor company. The Company designs, develops and markets low-power semiconductor solutions to original equipment manufacturers (OEMs) and other customers in the mobile storage and mobile communications markets. It is engaged in developing negative-AND (NAND) flash controller integrated circuits (ICs) for solid-state storage devices and specialty radio frequency (RF) ICs for mobile devices. In the mobile storage market, the Company’s products are controllers used in embedded storage products, such as Solid State Drives (SSDs), and Embedded Multimedia Cards (eMMCs), as well as expandable storage products, such as flash memory cards and universal serial bus (USB) flash drives. For the mobile communications market, the Company’s products are handset transceivers and mobile television (TV) System on Chips (SoCs). The Company’s products are used in devices, such as smartphones, tablets and personal computers (PCs).

Analog Devices Company Profile

Analog Devices, Inc. (Analog Devices) designs, manufactures and markets a portfolio of solutions that leverage high-performance analog, mixed-signal and digital signal processing technology, including integrated circuits (ICs), algorithms, software and subsystems. Its products include Analog Products, Converters, Amplifiers/Radio Frequency, Other Analog, Power Management and Reference, and Digital Signal Processing Products. The Company is a supplier of data converter products. The Company is a supplier of high-performance amplifiers. Its analog product line also includes products of high performance radio frequency (RF) ICs. The Company’s DSPs are used for high-speed numeric calculations. The Company offers its products for applications in various end markets, such as industrial, automotive, consumer and communications. The Company operates in the United States, Rest of North/South America, Europe, Japan and China.

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