Analog Devices Stock Shares $20 Bil Success With Investors

Analog Devices Stock Shares $20 Bil Success With Investors

In the last five years, Analog Devices (ADI) stock has returned $20 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let's look at some numbers and compare how this payout power stacks up against the market's biggest capital-return machines.

As it turns out, ADI stock has returned the 91st highest amount to shareholders in history.

Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management's confidence in the company's financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.

Top 10 Stocks By Total Shareholder Return

For full ranking, visit Buybacks & Dividends Ranking

What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.

That's the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let's look at some numbers for ADI. (see Buy or Sell Analog Devices Stock for more details)

Analog Devices Fundamentals

• Revenue Growth: 25.9% LTM and -0.5% last 3-year average.
• Cash Generation: Nearly 38.8% free cash flow margin and 29.7% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for ADI was -19.3%.
• Valuation: Analog Devices stock trades at a P/E multiple of 73.8

*LTM: Last Twelve Months

The table gives a good overview of what you get from ADI stock, but what about the risk?

ADI Historical Risk

ADI's no stranger to big drops. It plunged nearly 70% in the Dot-Com crash and about 59% during the Global Financial Crisis. The Covid selloff knocked it down around 34%, while the 2018 correction and the recent inflation shock caused dips of roughly 23% and 26%, respectively. Even with strong fundamentals, ADI has shown it can take a hit when the market turns sour. So, caution is still wise.

But the risk is not limited to major market crashes. Stocks fall even when markets are good - think events like earnings, business updates, and outlook changes. Read ADI Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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