Critical Contrast: ASE Technology (NYSE:ASX) & Analog Devices (NASDAQ:ADI)

Analog Devices (NASDAQ:ADIGet Free Report) and ASE Technology (NYSE:ASXGet Free Report) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Analog Devices and ASE Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Analog Devices 0 6 15 0 2.71
ASE Technology 0 1 1 0 2.50

Analog Devices currently has a consensus target price of $209.92, indicating a potential upside of 0.74%. ASE Technology has a consensus target price of $7.84, indicating a potential downside of 24.01%. Given Analog Devices’ stronger consensus rating and higher possible upside, research analysts plainly believe Analog Devices is more favorable than ASE Technology.

Volatility & Risk

Analog Devices has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, ASE Technology has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Insider & Institutional Ownership

86.8% of Analog Devices shares are owned by institutional investors. Comparatively, 6.8% of ASE Technology shares are owned by institutional investors. 0.3% of Analog Devices shares are owned by company insiders. Comparatively, 22.9% of ASE Technology shares are owned 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.

Dividends

Analog Devices pays an annual dividend of $3.68 per share and has a dividend yield of 1.8%. ASE Technology pays an annual dividend of $0.42 per share and has a dividend yield of 4.1%. Analog Devices pays out 65.8% of its earnings in the form of a dividend. ASE Technology pays out 91.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Analog Devices has increased its dividend for 22 consecutive years and ASE Technology has increased its dividend for 3 consecutive years.

Valuation & Earnings

This table compares Analog Devices and ASE Technology’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Analog Devices $12.31 billion 8.40 $3.31 billion $5.59 37.28
ASE Technology $18.69 billion 1.21 $1.16 billion $0.46 22.41

Analog Devices has higher earnings, but lower revenue than ASE Technology. ASE Technology 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 ASE Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Analog Devices 24.34% 12.76% 9.31%
ASE Technology 5.41% 10.09% 4.60%

Summary

Analog Devices beats ASE Technology on 13 of the 17 factors compared between the two stocks.

About Analog Devices

(Get Free Report)

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 ASE Technology

(Get Free Report)

ASE Technology Holding Co., Ltd., together with its subsidiaries, provides semiconductors packaging and testing, and electronic manufacturing services in the United States, Taiwan, Asia, Europe, and internationally. It develops, constructs, sells, leases, and manages real estate properties; produces substrates; offers information software, equipment leasing, investment advisory, and warehousing management services; commercial complex, after-sales, and support services; manages parking lot services; processes and sells computer and communication peripherals, electronic components, telecommunications equipment, and motherboards; and imports and exports goods and technology. ASE Technology Holding Co., Ltd. was founded in 1984 and is based in Kaohsiung, Taiwan.

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