Critical Contrast: Analog Devices (NASDAQ:ADI) & AU Optronics (OTCMKTS:AUOTY)

Analog Devices (NASDAQ:ADI) and AU Optronics (OTCMKTS:AUOTY) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

99.2% of Analog Devices shares are owned by institutional investors. Comparatively, 0.3% of AU Optronics shares are owned by institutional investors. 0.9% of Analog Devices shares are owned by company insiders. Comparatively, 16.0% of AU Optronics shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Analog Devices and AU Optronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Analog Devices 0 4 19 0 2.83
AU Optronics 0 1 0 0 2.00

Analog Devices presently has a consensus target price of $182.57, suggesting a potential upside of 5.24%. Given Analog Devices’ stronger consensus rating and higher possible upside, equities analysts clearly believe Analog Devices is more favorable than AU Optronics.

Volatility and Risk

Analog Devices has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, AU Optronics has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Dividends

Analog Devices pays an annual dividend of $2.76 per share and has a dividend yield of 1.6%. AU Optronics pays an annual dividend of $0.06 per share and has a dividend yield of 1.0%. Analog Devices pays out 56.2% of its earnings in the form of a dividend. Analog Devices has raised its dividend for 1 consecutive years. Analog Devices is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Analog Devices and AU Optronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Analog Devices 26.15% 18.86% 10.62%
AU Optronics N/A N/A N/A

Valuation & Earnings

This table compares Analog Devices and AU Optronics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Analog Devices $5.60 billion 11.40 $1.22 billion $4.91 35.33
AU Optronics $8.99 billion 0.66 -$608.06 million N/A N/A

Analog Devices has higher earnings, but lower revenue than AU Optronics.

Summary

Analog Devices beats AU Optronics on 12 of the 16 factors compared between the two stocks.

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 Wilmington, MA.

AU Optronics Company Profile

AU Optronics Corp. engages in the production and sales of liquid crystal display (LCD) monitor and organic light emitting display. Its products include thin film transistor liquid crystal display (TFT-LCD), low temperature polysilicon (LTPS), organic light emitting display (AMOLED) and integrated touch solutions. It provides solar module and solar power plant construction service. The company was founded by Kuen Yao Lee on August 12, 1996 and is headquartered in Hsinchu, Taiwan.

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