NVIDIA (NASDAQ:NVDA) and Analog Devices (NASDAQ:ADI) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.
Risk & Volatility
NVIDIA has a beta of 2.07, meaning that its stock price is 107% more volatile than the S&P 500. Comparatively, Analog Devices has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500.
NVIDIA pays an annual dividend of $0.64 per share and has a dividend yield of 0.4%. Analog Devices pays an annual dividend of $2.16 per share and has a dividend yield of 1.9%. NVIDIA pays out 10.5% of its earnings in the form of a dividend. Analog Devices pays out 36.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NVIDIA has raised its dividend for 6 consecutive years and Analog Devices has raised its dividend for 9 consecutive years. Analog Devices is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares NVIDIA and Analog Devices’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares NVIDIA and Analog Devices’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NVIDIA||$11.72 billion||9.37||$4.14 billion||$6.07||29.69|
|Analog Devices||$6.20 billion||6.87||$1.50 billion||$5.94||19.40|
NVIDIA has higher revenue and earnings than Analog Devices. Analog Devices is trading at a lower price-to-earnings ratio than NVIDIA, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
64.4% of NVIDIA shares are owned by institutional investors. Comparatively, 87.5% of Analog Devices shares are owned by institutional investors. 4.6% of NVIDIA shares are owned by company insiders. Comparatively, 0.5% of Analog Devices shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of recent ratings for NVIDIA and Analog Devices, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NVIDIA presently has a consensus price target of $190.33, indicating a potential upside of 5.62%. Analog Devices has a consensus price target of $112.24, indicating a potential downside of 2.62%. Given NVIDIA’s higher probable upside, research analysts clearly believe NVIDIA is more favorable than Analog Devices.
NVIDIA beats Analog Devices on 13 of the 17 factors compared between the two stocks.
NVIDIA Company Profile
NVIDIA Corp. engages in the design and manufacture of computer graphics processors, chipsets, and related multimedia software. It operates through the Graphics Processing Unit (GPU) and Tegra Processor segments. The GPU segment comprises of product brands which aims specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. The and Tegra Processor segment integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for autonomous robots, drones, and cars, as well as for consoles and mobile gaming and entertainment devices. The company was founded by Jen-Hsun Huang, Chris A. Malachowsky, and Curtis R. Priem in January 1993 and is headquartered in Santa Clara, CA.
Analog Devices Company Profile
Analog Devices, Inc. engages in the design, development, manufacture, and marketing of integrated circuits (ICs). Its products include industrial process control systems, medical imaging equipment, factory process automation systems, patient vital signs monitoring devices, instrumentation and measurement systems, wireless infrastructure equipment, energy management systems, networking equipment, aerospace and defense electronics, optical systems, automobiles, and portable consumer devices. The company was founded by Raymond P. Stata and Matthew Lorber in 1965 and is headquartered in Norwood, MA.
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