This week’s Stock of the Week bridges the gap between digital and analog data for a wide variety of industries.
Analog Devices (ADI) creates products that convert real-world analog data into digital information and digital data into analog signals. This is important for many diverse fields including medical imaging, automobiles, aerospace, defense, cellular communications and energy.
About 40% of the company’s revenue comes from sales in the US. Analog Devices products are important to businesses in so many fields that even a downturn in several sectors should have only a modest impact on its revenue, which was $5.1 billion in 2017 and is likely to be $6.2 billion this year and $6.35 billion in 2019.
The company’s strong research-and-development commitment keeps it in the forefront of technology. And it generates a lot of cash—likely around $7/share next year. The dividend currently stands at $1.92/share/yr., recently yielding 2.2%, and appears secure.
Fiscal year: October. Earnings per share: 2019 est./$6.05…2018 est./$5.85…2017/$4.68.
Bill Staton, CFA, is senior director, Novare Capital Management, Charlotte, North Carolina, which manages $1.1 billion. NovareCapital.com