SemiLEDs (LEDS) versus Analog Devices (ADI) Critical Survey

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

Volatility and Risk

SemiLEDs has a beta of 2.83, meaning that its share price is 183% more volatile than the S&P 500. Comparatively, Analog Devices has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Earnings and Valuation

This table compares SemiLEDs and Analog Devices’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SemiLEDs $7.49 million 1.37 -$2.98 million N/A N/A
Analog Devices $6.20 billion 6.06 $1.50 billion $5.94 17.13

Analog Devices has higher revenue and earnings than SemiLEDs.

Profitability

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

Net Margins Return on Equity Return on Assets
SemiLEDs -55.18% -65.36% -24.04%
Analog Devices 24.12% 20.88% 10.81%

Dividends

Analog Devices pays an annual dividend of $1.92 per share and has a dividend yield of 1.9%. SemiLEDs does not pay a dividend. Analog Devices pays out 32.3% of its earnings in the form of a dividend. Analog Devices has raised its dividend for 9 consecutive years.

Insider and Institutional Ownership

0.7% of SemiLEDs shares are held by institutional investors. Comparatively, 90.7% of Analog Devices shares are held by institutional investors. 40.1% of SemiLEDs shares are held by insiders. Comparatively, 0.5% of Analog Devices shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SemiLEDs and Analog Devices, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SemiLEDs 0 0 0 0 N/A
Analog Devices 1 9 13 0 2.52

Analog Devices has a consensus target price of $100.37, indicating a potential downside of 1.36%. Given Analog Devices’ higher probable upside, analysts clearly believe Analog Devices is more favorable than SemiLEDs.

Summary

Analog Devices beats SemiLEDs on 11 of the 14 factors compared between the two stocks.

About SemiLEDs

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips and LED components in the United States, Taiwan, the Netherlands, France, China, Germany, Hong Kong, and internationally. The company's products are used for general lighting applications, including street lights and commercial, industrial, system and residential lighting. Its LED chips also used in specialty industrial applications, such as ultraviolet, or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, LED lighting for horticulture applications, architectural lighting and entertainment lighting. The company also sells enhanced vertical, LED product series in blue, white, green, and UV in selected markets; LED chips to packagers or to distributors; and lighting products primarily to original design manufacturers of lighting products and the end-users of lighting devices, as well as packages and sells its LED chips into LED components to distributors. SemiLEDs Corporation was incorporated in 2005 and is headquartered in Chunan, Taiwan.

About Analog Devices

Analog Devices, Inc. designs, manufactures, and markets integrated circuits (ICs), algorithms, software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. The company offers data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; high-performance amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure. It also provides power management and reference products for power management and conversion applications in the automotive, communications, industrial, and high-end consumer markets; and microelectromechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes to sense rotation, and inertial measurement units to sense multiple degrees of freedom. In addition, the company offers isolators for various applications, such as universal serial bus isolation in patient monitors; and smart metering and satellite applications, as well as digital signal processing products for high-speed numeric calculations Its products are used in electronic equipment, including industrial process control systems, medical imaging equipment, factory automation systems, patient monitoring devices, instrumentation and measurement systems, wireless infrastructure equipment, energy management systems, networking equipment, aerospace and defense electronics, optical systems, automobiles, and portable electronic devices. The company serves clients in industrial, automotive, consumer, and communications markets through a direct sales force, third-party distributors, and independent sales representatives in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia, as well as through its Website. Analog Devices, Inc. was founded in 1965 and is headquartered in Norwood, Massachusetts.

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