Updated 4/14/25
Analog Devices, Inc. (ADI) plays a vital role in the semiconductor space, delivering the precision technology that powers everything from industrial automation and automotive systems to healthcare devices and consumer tech. With over two decades of consistent dividend growth, strong free cash flow, and a leadership team focused on long-term value creation, ADI continues to demonstrate financial stability and strategic discipline. Despite recent stock price volatility, the company remains profitable, maintains a healthy balance sheet, and continues to return capital through rising dividends and share buybacks. Backed by improving demand trends and a pipeline of customer wins, ADI is positioning itself for future growth while staying grounded in operational strength.
Recent Events
It’s been a mixed bag for the semiconductor world over the past year, and ADI hasn’t been immune. Revenue for the trailing twelve months came in at $9.34 billion, which reflects a year-over-year dip of about 3.6%. Not ideal, but not surprising either, given the broader industry slowdown and cooling demand in some end markets.
Earnings also took a bit of a step back, falling more than 15% year-over-year. Despite that, margins are holding up better than one might expect. The company posted a profit margin of 16.75% and an operating margin close to 23%. For a company facing a tougher demand environment, those numbers suggest solid cost control and pricing discipline.
Balance sheet health is another area where ADI continues to show strength. With $2.72 billion in cash on hand and a manageable $7.62 billion in debt, liquidity isn’t a concern. The debt-to-equity ratio is under 22%, and the current ratio is hovering just below 2—both signs that the company is well-positioned to ride out short-term headwinds without making sacrifices.
And through all this? The dividend kept climbing.
Key Dividend Metrics
📈 Forward Yield: 2.21%
💸 Annual Dividend Rate: $3.96
📊 5-Year Average Yield: 1.75%
🧮 Payout Ratio: 117.6%
🔁 Dividend Growth Streak: Over 20 years
📅 Most Recent Dividend: $0.99 paid March 17, 2025
🚨 Ex-Dividend Date: March 4, 2025
Dividend Overview
ADI’s dividend is one of those steady performers that doesn’t draw a lot of attention—but it absolutely should. The current yield of 2.21% sits comfortably above the five-year average. That alone gives it a bit of an edge right now, especially for investors who prioritize income over short-term growth.
Yes, the payout ratio based on earnings looks a little elevated at just over 117%. But here’s where context matters. ADI’s free cash flow over the last year was roughly $3 billion, which easily covers the dividend outlay. That’s the kind of detail that gets missed when looking at just EPS-based ratios.
In short, ADI’s dividend isn’t just intact—it’s well-supported. Even as profits have softened, the cash is still flowing in. That kind of resilience is a rare commodity in a cyclical business like semiconductors.
The stock has pulled back from its highs, which has helped boost the yield. That might be frustrating for those who bought at higher levels, but for income seekers, it makes ADI a more compelling value. The company hasn’t skipped a beat when it comes to returning capital to shareholders, and there’s no indication that’s about to change.
Dividend Growth and Safety
If you’re building a portfolio around income and long-term stability, ADI checks a lot of the right boxes. For over two decades, the company has raised its dividend each and every year. The most recent increase brought the quarterly payout up to $0.99, a nearly 6% jump from the previous level. That’s not a huge leap, but it’s meaningful—especially in the current earnings environment.
Safety is always a key concern for dividend investors, and ADI scores well here. Management has shown that even during tougher quarters, they’re committed to maintaining and growing the dividend. With operating cash flow at $3.84 billion over the last year, there’s room to continue that trend.
Beyond the numbers, there’s also something to be said for the kind of company ADI is. It supplies core components for critical systems—areas where demand may ebb and flow, but never truly disappears. That gives it a kind of staying power that’s valuable for anyone relying on dividend income.
Valuation-wise, ADI trades at a forward P/E of about 24, which isn’t screaming cheap—but with a PEG ratio under 0.80, there’s arguably some value for those looking beyond the next few quarters. And with a price-to-book ratio around 2.5, it’s trading reasonably compared to its peers in the chip space.
All in all, ADI continues to be the kind of company that dividend investors can lean on. It may not make a splash, but it builds wealth—and does so with a calm, predictable rhythm that’s hard to find in today’s markets.
Cash Flow Statement
Analog Devices, Inc. (ADI) generated $3.84 billion in operating cash flow over the trailing twelve months, maintaining consistent performance despite a dip from the $4.8 billion peak in 2022. This solid cash generation supports its dividend and capital return strategy. Capital expenditures were trimmed slightly to $656 million, allowing free cash flow to remain strong at $3.18 billion—more than enough to cover the dividend and other obligations without straining the balance sheet.
Investing cash flow came in at negative $1.08 billion, mostly reflecting ongoing investment in long-term assets and strategic positioning rather than anything unexpected. On the financing side, the company continued its shareholder-friendly approach, with $1.71 billion in outflows. That includes debt repayments and share repurchases, both of which were notably scaled back from the elevated levels seen in 2022. The end cash position increased to $2.35 billion, up from $958 million a year earlier, giving ADI more flexibility heading into future quarters.
Analyst Ratings
📈 Analog Devices (ADI) has recently attracted positive sentiment from analysts, with several raising their outlook based on the company’s strong fundamentals and strategic direction. One notable upgrade came from a firm initiating coverage with a Buy rating and setting a price target of $245. The analyst pointed to ADI’s consistently strong cash flow and the long-term benefits of its acquisition of Maxim Integrated. With margin expansion on the horizon and a history of shareholder-friendly policies, including an average dividend growth of 10% over the past decade, the outlook is optimistic.
💬 Another encouraging note came from an analyst at a major investment bank who also gave the stock a Buy rating, this time with a more aggressive price target of $265. The reasoning focused on ADI’s relative insulation from cyclical segments like automotive, as well as signs of improving inventory trends across its markets. These factors are expected to support a rebound in earnings and improve near-term profitability.
🎯 Across the board, the consensus rating stands at Moderate Buy, with an average price target of approximately $256.15. That implies a potential upside of more than 40% from current trading levels. Analysts seem to be on the same page: ADI is navigating headwinds better than most and remains a compelling long-term story.
Earning Report Summary
Solid Start to the Year
Analog Devices kicked off fiscal 2025 on the right foot, reporting better-than-expected results in its latest quarterly earnings. Revenue came in at $2.42 billion—not quite a record, but still solid, especially considering the environment. While it was down about 4% compared to the same period last year, it still managed to beat what Wall Street had penciled in. Earnings per share, adjusted for one-time items, landed at $1.63, also ahead of forecasts.
What helped was a nice rebound in a few key areas. Industrial, automotive, and communications all showed some sequential strength, but the real surprise came from the consumer segment, which posted a 19% jump year over year. That’s not something you see often in this space, especially given the usual cyclicality of demand. Management credited some of this momentum to a better macro backdrop and new customer wins starting to make a difference.
Leadership’s Take
CEO Vincent Roche sounded upbeat about where things are heading. He pointed out that the recovery is gaining traction and emphasized the steady ramp-up of new design wins turning into actual revenue. That’s a good sign, suggesting that ADI’s innovation engine is still humming and converting pipeline into dollars.
CFO Richard Puccio added a bit more color, mentioning that bookings have been slowly improving and that both the industrial and automotive markets look particularly encouraging. His tone suggested a sense of cautious optimism, with expectations for both sequential and year-over-year growth in the current quarter.
ADI also continued its long-standing tradition of rewarding shareholders. The company bumped up its quarterly dividend by 8%, bringing the payout to $0.99 per share. That’s now 21 consecutive years of dividend hikes—a track record not many in tech can match. On top of that, they authorized an additional $10 billion for share repurchases, bringing the total buyback war chest to around $11.5 billion.
Looking Ahead
As for the next quarter, ADI is guiding for revenue of $2.5 billion, give or take $100 million. Earnings per share are expected to be in the ballpark of $1.68, plus or minus ten cents. That guidance lines up with the leadership’s tone—confident, but not overly aggressive. There’s clearly belief in the demand pipeline, especially in sectors where ADI tends to lead with differentiated products.
All in all, the quarter painted a picture of a company that’s finding its footing after a tougher stretch and is looking ahead with more clarity than it had just a few quarters ago.
Chart Analysis
Price Movement and Moving Averages
Looking at the past year of price action in ADI, there’s a clear shift in momentum that unfolded over time. The stock enjoyed a strong uptrend in the first half of the chart, climbing steadily and peaking near the $245 mark. During this period, the 50-day moving average stayed well above the 200-day moving average, reflecting solid short-term strength and positive sentiment.
However, things started to change in the second half. The 50-day moving average rolled over and began trending downward, eventually crossing below the 200-day line—a classic sign of waning momentum and a more cautious environment setting in. That crossover wasn’t a flash event; it aligned with a broader and more persistent downturn in the stock price. By late March and into April, prices dropped sharply, with the stock briefly falling below $170 before attempting a modest rebound.
Volume and Relative Strength Index (RSI)
The volume profile tells its own story. Through most of the chart, trading volume was relatively stable, but there was a noticeable uptick in activity as the stock dropped in late March and early April. That spike in volume suggests that the selloff wasn’t just a few holders moving out—it brought in real conviction on the downside, possibly due to earnings, macro news, or technical triggers.
RSI dipped into oversold territory multiple times during the recent decline, pushing well below the 30 level. This type of movement often reflects short-term exhaustion in selling pressure and can sometimes precede a bounce. That bounce has started to form, but it’s too early to tell whether it’s the beginning of a sustained recovery or just a pause in a broader downtrend.
Overall Takeaway
What’s clear is that the stock is in a transitional phase. The downtrend broke what had been a stable, range-bound pattern for much of the year. The sharp correction, combined with high volume and oversold RSI conditions, points to heightened volatility and caution in the near term. But from a broader perspective, the company has navigated past cycles like this before, and sharp price dislocations can sometimes create more attractive entry points for those with a longer time horizon.
Management Team
At the helm of Analog Devices (ADI) is Vincent Roche, who has been with the company since 1988 and took on the role of CEO in 2013. His long tenure brings deep familiarity with the business, and his leadership has helped guide ADI through a range of market conditions with a steady focus on innovation and smart acquisitions that have expanded the company’s technology base and market reach.
Supporting Roche is a well-rounded executive team. Richard Puccio, the Executive Vice President and Chief Financial Officer, has an impressive background that includes leadership roles at Amazon Web Services and PwC. His focus has been on maintaining financial discipline while ensuring capital is allocated efficiently. Anelise Sacks, the Chief Customer Officer, brings a sharp focus to building and maintaining strategic customer relationships. Janene Asgeirsson, as Chief Legal Officer, plays a key role in keeping the company on track with compliance, legal governance, and broader regulatory requirements. Together, this leadership group blends operational experience with forward-thinking strategy.
Valuation and Stock Performance
ADI’s stock has seen its fair share of movement over the past year. After peaking at $247.10 in February, the stock retraced to around $178 in April 2025. That pullback of roughly 28% has drawn attention, particularly from value-focused investors who see strength in the fundamentals.
Valuation-wise, the stock currently trades at a forward price-to-earnings ratio of about 23.9. That’s not a screaming bargain, but it’s reasonable for a company with a stable dividend, strong cash flows, and exposure to long-term growth markets like automation, connectivity, and power management. The price-to-book ratio of 2.53 adds another layer of confidence, suggesting that the market still values the underlying business appropriately.
Analyst expectations remain relatively high, with an average price target near $256.15. That represents a sizable upside from current levels. Much of that optimism is grounded in the company’s consistent financial performance, its ability to navigate through macroeconomic shifts, and its long-term strategic execution.
Risks and Considerations
Despite a solid track record, there are a few risk factors that investors should keep on their radar. The semiconductor space is cyclical by nature. Economic slowdowns can quickly ripple into order declines, especially in end markets like consumer electronics or automotive.
Competition remains another consideration. ADI operates in a landscape filled with large, capable peers. Pricing pressure, innovation pace, and customer retention are all ongoing challenges in this space. On top of that, supply chain reliability and geopolitical factors—especially those impacting global trade—can affect production timelines and margin profiles.
The company’s acquisition strategy, while historically successful, also comes with its own execution risks. Mergers and integrations don’t always go smoothly, and ensuring alignment with ADI’s culture and operational model will continue to be an important factor in determining how value accretive those moves are over time.
Final Thoughts
ADI has been around long enough to know how to navigate both opportunity and adversity. While recent stock price weakness may give some investors pause, the underlying story remains intact. Strong leadership, a disciplined approach to capital management, and steady innovation give the company a durable edge.
Its current valuation suggests the market may be offering a window of opportunity. With a long history of financial reliability, consistent dividends, and a focus on high-demand end markets, ADI still has the core ingredients of a business built to perform over the long haul. For those willing to look past the short-term volatility, it’s a name worth keeping an eye on.