Contrasting Linear Technology (LLTC) and Alliance Fiber Optic Products (NASDAQ:AFOP)

Linear Technology (NASDAQ: LLTC) and Alliance Fiber Optic Products (NASDAQ:AFOP) are both technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Institutional & Insider Ownership

90.2% of Linear Technology shares are held by institutional investors. 1.2% of Linear Technology shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Linear Technology pays an annual dividend of $1.32 per share and has a dividend yield of 2.0%. Alliance Fiber Optic Products does not pay a dividend. Linear Technology pays out 64.7% of its earnings in the form of a dividend.

Profitability

This table compares Linear Technology and Alliance Fiber Optic Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Linear Technology 32.99% 26.98% 23.04%
Alliance Fiber Optic Products -4.29% -3.41% -2.68%

Valuation & Earnings

This table compares Linear Technology and Alliance Fiber Optic Products’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Linear Technology N/A N/A N/A $2.04 31.86
Alliance Fiber Optic Products N/A N/A N/A $0.49 37.78

Linear Technology is trading at a lower price-to-earnings ratio than Alliance Fiber Optic Products, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Linear Technology has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Alliance Fiber Optic Products has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Linear Technology and Alliance Fiber Optic Products, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Linear Technology 0 1 0 0 2.00
Alliance Fiber Optic Products 0 0 0 0 N/A

Linear Technology presently has a consensus target price of $63.00, indicating a potential downside of 3.08%. Given Linear Technology’s higher probable upside, analysts clearly believe Linear Technology is more favorable than Alliance Fiber Optic Products.

Summary

Linear Technology beats Alliance Fiber Optic Products on 9 of the 11 factors compared between the two stocks.

About Linear Technology

Linear Technology Corporation is engaged in designing, manufacturing and marketing a line of analog integrated circuits. The Company produces power management, data conversion, signal conditioning, radio frequency (RF) and interface integrated circuits (ICs) and wireless sensor network products, among others. The Company’s principal product categories include amplifiers, high speed amplifiers, voltage regulators, voltage references, interfaces, data converters, battery stack monitors, silicon oscillators and timer blox, phase locked loop (PLL) synthesizers and clock distribution, SmartMesh embedded wireless sensor network, radio and microwave frequency circuits, Power Over Ethernet (PoE) Controllers, and Other. The Company’s products provide a bridge between analog world and the digital electronics in communications, networking, industrial, transportation, computer, medical, instrumentation, consumer, and military and aerospace systems.

About Alliance Fiber Optic Products

Alliance Fiber Optic Products, Inc. (AFOP) designs, manufactures and markets a range of fiber optic components and integrated modules. The Company offers a range of products, including interconnect devices, which are used to connect optical fibers and components; couplers and splitters, which are used to divide and combine optical power, and dense wavelength division multiplexing (DWDM) devices, which are used to separate and combine multiple specific wavelengths. Its connectivity product family provides a line of optical interconnect devices, couplers and splitters, planar lightwave circuits (PLC) and related optical products, as well as integrated modules incorporating these devices. Its optical passive products include wavelength division multiplexing (WDM), coarse wavelength division multiplexer (CWDM) and DWDM components. Its product offerings include connectivity products and optical passive products.

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