Analyzing Analog Devices (NASDAQ:ADI) & Sequans Communications (SQNS)

Analog Devices (NASDAQ: ADI) and Sequans Communications (NYSE:SQNS) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitability, analyst recommendations and earnings.

Valuation & Earnings

This table compares Analog Devices and Sequans Communications’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Analog Devices $5.11 billion 6.57 $727.25 million $1.98 45.99
Sequans Communications $45.58 million 3.74 -$24.78 million ($0.31) -6.94

Analog Devices has higher revenue and earnings than Sequans Communications. Sequans Communications is trading at a lower price-to-earnings ratio than Analog Devices, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Analog Devices 14.22% 18.78% 8.40%
Sequans Communications -46.93% -256.90% -34.40%

Dividends

Analog Devices pays an annual dividend of $1.80 per share and has a dividend yield of 2.0%. Sequans Communications does not pay a dividend. Analog Devices pays out 90.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of current recommendations and price targets for Analog Devices and Sequans Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Analog Devices 0 9 16 0 2.64
Sequans Communications 0 0 7 0 3.00

Analog Devices currently has a consensus price target of $97.32, suggesting a potential upside of 6.86%. Sequans Communications has a consensus price target of $3.96, suggesting a potential upside of 84.39%. Given Sequans Communications’ stronger consensus rating and higher probable upside, analysts clearly believe Sequans Communications is more favorable than Analog Devices.

Volatility & Risk

Analog Devices has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Sequans Communications has a beta of 2.41, meaning that its share price is 141% more volatile than the S&P 500.

Insider and Institutional Ownership

87.0% of Analog Devices shares are owned by institutional investors. Comparatively, 31.8% of Sequans Communications shares are owned by institutional investors. 1.1% of Analog Devices shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Analog Devices beats Sequans Communications on 12 of the 16 factors compared between the two stocks.

About Analog Devices

Analog Devices, Inc. (Analog Devices) designs, manufactures and markets a portfolio of solutions that leverage high-performance analog, mixed-signal and digital signal processing technology, including integrated circuits (ICs), algorithms, software and subsystems. Its products include Analog Products, Converters, Amplifiers/Radio Frequency, Other Analog, Power Management and Reference, and Digital Signal Processing Products. The Company is a supplier of data converter products. The Company is a supplier of high-performance amplifiers. Its analog product line also includes products of high performance radio frequency (RF) ICs. The Company’s DSPs are used for high-speed numeric calculations. The Company offers its products for applications in various end markets, such as industrial, automotive, consumer and communications. The Company operates in the United States, Rest of North/South America, Europe, Japan and China.

About Sequans Communications

Sequans Communications S.A. is a fabless designer, developer and supplier of fourth Generation long term evolution (4G LTE) semiconductor solutions for wireless broadband applications, with a specific focus on the single-mode device market. Its semiconductor solutions integrate baseband processor and radio frequency (RF) transceiver integrated circuits (ICs) along with its signal processing techniques, algorithms and software stacks. In the broadband data device market, its solutions serve as the wireless communications platform in devices, such as smartphones; Universal Serial Bus (USB) dongles; portable routers; embedded wireless modems for laptops, tablets, and other consumer multimedia devices; and customer-premises equipment, such as fixed wireless access modems, routers and residential gateways. The Company’s products include SQN3330, SQN3223, SQN3221, SQN3241, VZ120Q, VZ22Q, VZ22M, US60L, SQN3220, SQN3240, SQN3120, SQN5120, SQN3140, VZ20Q, VZ20M, SQN1210 and SQN1220.

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