NXP Semiconductors (NASDAQ:NXPI) versus Analog Devices (NASDAQ:ADI) Financial Review

Analog Devices (NASDAQ:ADI) and NXP Semiconductors (NASDAQ:NXPI) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Valuation and Earnings

This table compares Analog Devices and NXP Semiconductors”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Analog Devices	$9.43 billion	12.15	$1.64 billion	$3.67	62.87
NXP Semiconductors	$12.61 billion	4.53	$2.51 billion	$8.39	27.03

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

Profitability

This table compares Analog Devices and NXP Semiconductors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Analog Devices	18.65%	9.56%	6.99%
NXP Semiconductors	17.72%	27.99%	10.75%

Dividends

Analog Devices pays an annual dividend of $3.96 per share and has a dividend yield of 1.7%. NXP Semiconductors pays an annual dividend of $4.06 per share and has a dividend yield of 1.8%. Analog Devices pays out 107.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NXP Semiconductors pays out 48.4% of its earnings in the form of a dividend. Analog Devices has increased its dividend for 23 consecutive years. NXP Semiconductors is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Analog Devices and NXP Semiconductors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Analog Devices	0	6	19	1	2.81
NXP Semiconductors	0	3	15	2	2.95

Analog Devices presently has a consensus target price of $258.89, indicating a potential upside of 12.19%. NXP Semiconductors has a consensus target price of $256.05, indicating a potential upside of 12.93%. Given NXP Semiconductors’ stronger consensus rating and higher probable upside, analysts clearly believe NXP Semiconductors is more favorable than Analog Devices.

Risk and Volatility

Analog Devices has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, NXP Semiconductors has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Institutional & Insider Ownership

86.8% of Analog Devices shares are held by institutional investors. Comparatively, 90.5% of NXP Semiconductors shares are held by institutional investors. 0.3% of Analog Devices shares are held by company insiders. Comparatively, 0.1% of NXP Semiconductors shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

NXP Semiconductors beats Analog Devices on 12 of the 18 factors compared between the two stocks.

About Analog Devices

Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia. The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and consumer markets; and power ICs that include performance, integration, and software design simulation tools for accurate power supply designs. It also offers amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and micro-electro-mechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators. In addition, the company provides digital signal processing and system products for numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, defense and healthcare, and communications markets through a direct sales force, third-party distributors, and independent sales representatives, as well as online. Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.

About NXP Semiconductors

NXP Semiconductors N.V. offers various semiconductor products. The company's product portfolio includes microcontrollers; application processors, including i.MX application processors, and i.MX 8 and 9 family of applications processors; communication processors; wireless connectivity solutions, such as near field communications, ultra-wideband, Bluetooth low-energy, Zigbee, and Wi-Fi and Wi-Fi/Bluetooth integrated SoCs; analog and interface devices; radio frequency power amplifiers; and security controllers, as well as semiconductor-based environmental and inertial sensors, including pressure, inertial, magnetic, and gyroscopic sensors. Its products are used in various applications, including automotive, industrial and Internet of Things, mobile, and communication infrastructure. The company markets its products to various original equipment manufacturers, contract manufacturers, and distributors. It operates in China, the Netherlands, the United States, Singapore, Germany, Japan, South Korea, Taiwan, and internationally. N.V. was incorporated in 2006 and is headquartered in Eindhoven, the Netherlands.