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Analog Devices(ADI) is the leader in the market for chips that translate between analog and digital signals, an implementation that's found in everything from cell phones to cars. In total, ADI serves more than 60,000 customers worldwide, a broad customer base that exempts the firm from worrying about the fortunes or decisions of a single major customer.
Analog chips are a niche business that's often an afterthought for OEMs who are developing the products that they're used in. For that reason, firms like ADI are much less likely to face risks of internal development among their customers. It just makes more sense for OEMs to buy temperature sensors or accelerometers from ADI than it does to try to develop those chips in-house. A wide portfolio of proprietary analog chip designs should help to defend ADI's share of the market.
Financially, Analog Devices is in stellar shape, with a deep net cash position and substantial cash flow generation abilities. That's part of the reason why the firm was able to increase its dividend payout by 20% on Wednesday. The move puts ADI's yield at a very attractive 3.05% right now.
Income investors looking for tech sector exposure should put this stock near the top of their lists.
Analog Devices shows up on lists of
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