Analyzing Linear Technology (LLTC) and Maxim Integrated Products (MXIM)

Maxim Integrated Products (NASDAQ: MXIM) and Linear Technology (NASDAQ:LLTC) are both large-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Institutional & Insider Ownership

90.3% of Maxim Integrated Products shares are owned by institutional investors. Comparatively, 90.2% of Linear Technology shares are owned by institutional investors. 1.1% of Maxim Integrated Products shares are owned by insiders. Comparatively, 1.2% of Linear Technology shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Maxim Integrated Products and Linear Technology, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Maxim Integrated Products 1 9 9 0 2.42
Linear Technology 0 3 0 0 2.00

Maxim Integrated Products currently has a consensus price target of $52.16, suggesting a potential downside of 5.25%. Linear Technology has a consensus price target of $63.00, suggesting a potential downside of 3.08%. Given Linear Technology’s higher possible upside, analysts plainly believe Linear Technology is more favorable than Maxim Integrated Products.

Valuation & Earnings

This table compares Maxim Integrated Products and Linear Technology’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Maxim Integrated Products $2.30 billion 6.75 $571.61 million $2.05 26.85
Linear Technology N/A N/A N/A $2.04 31.86

Maxim Integrated Products has higher revenue and earnings than Linear Technology. Maxim Integrated Products is trading at a lower price-to-earnings ratio than Linear Technology, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Maxim Integrated Products has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Linear Technology has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Maxim Integrated Products and Linear Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Maxim Integrated Products 25.48% 29.55% 15.06%
Linear Technology 32.99% 26.98% 23.04%

Dividends

Maxim Integrated Products pays an annual dividend of $1.44 per share and has a dividend yield of 2.6%. Linear Technology pays an annual dividend of $1.32 per share and has a dividend yield of 2.0%. Maxim Integrated Products pays out 70.2% of its earnings in the form of a dividend. Linear Technology pays out 64.7% 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. Maxim Integrated Products has raised its dividend for 8 consecutive years. Maxim Integrated Products is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Maxim Integrated Products beats Linear Technology on 8 of the 15 factors compared between the two stocks.

Maxim Integrated Products Company Profile

Maxim Integrated Products, Inc. is engaged in designing, developing, manufacturing and marketing a range of linear and mixed-signal integrated circuits, referred to as analog circuits. The Company also provides a range of high-frequency process technologies and capabilities for use in custom designs. The Company caters to automotive, communications and data center, computing, consumer and industrial markets. It offers a range of products, such as switching regulators, battery management, isolated power, charge pumps, linear regulators, light emitting diode (LED) drivers, motor driver integrated circuits (ICs), monitors and sequencers, transceivers, controllers and expanders, level translators, signal line protection ICs, broadband switches, powerline communications, real-time clocks, embedded security, microcontrollers, 1-Wire, iButton, data loggers, clock generation and distribution, memory products, optical, signal integrity, high-speed signaling, and display power and control.

Linear Technology Company Profile

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.

Receive News & Ratings for Maxim Integrated Products Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Maxim Integrated Products and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply