Altera (NASDAQ: ALTR) and Analog Devices (NASDAQ:ADI) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, risk, profitabiliy and valuation.
Insider and Institutional Ownership
87.6% 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 large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Dividends
Analog Devices pays an annual dividend of $1.80 per share and has a dividend yield of 2.3%. Altera does not pay a dividend. Analog Devices pays out 67.9% of its earnings in the form of a dividend.
Profitability
This table compares Altera and Analog Devices’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Altera | 15.40% | 7.40% | 4.23% |
| Analog Devices | 20.88% | 19.39% | 9.39% |
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Altera and Analog Devices, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Altera | 0 | 1 | 0 | 0 | 2.00 |
| Analog Devices | 2 | 7 | 16 | 0 | 2.56 |
Analog Devices has a consensus price target of $90.91, suggesting a potential upside of 16.64%. Given Analog Devices’ stronger consensus rating and higher possible upside, analysts plainly believe Analog Devices is more favorable than Altera.
Valuation & Earnings
This table compares Altera and Analog Devices’ top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Altera | N/A | N/A | N/A | N/A | N/A |
| Analog Devices | $4.01 billion | 7.13 | $1.55 billion | $2.65 | 29.41 |
Analog Devices has higher revenue and earnings than Altera.
Summary
Analog Devices beats Altera on 10 of the 11 factors compared between the two stocks.
Altera Company Profile
Altera Corporation is a semiconductor company that designs and sells a range of products, including programmable logic devices (PLDs), highly integrated power devices, pre-defined design building blocks and development software. PLDs consist of field-programmable gate arrays (FPGAs), which are semiconductor integrated circuits, or chips, that the Company’s customers program to perform desired logic and processing functions in their electronic systems. Highly integrated power devices, known as power system-on-chip devices (PowerSoCs), which simplify and drive the miniaturization of power circuitry found in the electronic systems of the Company’s PLD customers. Pre-defined design building blocks, known as intellectual property (IP) cores, which can be licensed by customers to add standard functions to their PLD designs. Development software is used by customers to develop, compile and verify their designs, and then program their designs into the Company’s PLDs.
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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