May 22, 2026 a 12:46 pm
ADI: Dividend Analysis - Analog Devices, Inc.
Analog Devices, Inc. (NASDAQ: ADI) demonstrates a consistent and reliable dividend profile, offering investors a steady income stream. With a history of increasing dividend payouts over 24 consecutive years, ADI presents itself as a strong candidate for dividend-focused portfolios. Its dividend yield, combined with sound payout ratios, reflects a commitment to returning capital to shareholders while sustaining growth.
📊 Overview
| Metric | Value |
|---|---|
| Sector | Technology |
| Dividend yield | 1.09% |
| Current dividend per share | 3.89 USD |
| Dividend history | 24 years |
| Last cut or suspension | None |
🗣️ Dividend History
The steady history of dividend payments highlights ADI's financial resilience and commitment to shareholder returns. A long track record of dividends indicates financial stability and increases investor confidence.
| Year | Dividend Per Share (USD) |
|---|---|
| 2026 | 2.2 |
| 2025 | 3.96 |
| 2024 | 3.68 |
| 2023 | 3.44 |
| 2022 | 3.04 |
📈 Dividend Growth
Monitoring dividend growth is crucial as it indicates the potential for increasing returns. ADI has shown a moderate but steady dividend growth rate over the past years, showcasing its ability to enhance shareholder value.
| Time | Growth |
|---|---|
| 3 years | 9.21% |
| 5 years | 9.81% |
The average dividend growth is 9.81% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
The payout ratio is an essential consideration for dividend sustainability. ADI maintains balanced payout ratios, ensuring dividends are sustainable over the long term.
| Key figure | Ratio |
|---|---|
| EPS-based | 57.28% |
| Free cash flow-based | 41.53% |
With an EPS payout of 57.28% and a FCF payout of 41.53%, ADI's dividends are well-covered, highlighting fiscal discipline and ongoing capacity to reward shareholders.
✅ Cashflow & Capital Efficiency
Analyzing cash flow metrics enables investors to gauge the efficiency and sustainability of a company's operations. High-quality cash flows and capital efficiency bolster long-term dividend potential.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 3.70% | 2.79% | 4.41% |
| Earnings Yield | 1.96% | 1.46% | 4.11% |
| CAPEX to Operating Cash Flow | 10.61% | 18.96% | 26.18% |
| Stock-based Compensation to Revenue | 2.92% | 2.79% | 2.44% |
| Free Cash Flow / Operating Cash Flow Ratio | 88.9% | 81.04% | 73.82% |
ADI's metrics demonstrate efficient use of capital and a high ratio of free cash flow to operating cash flow, indicating robust cash generation that supports dividend sustainability.
⚠️ Balance Sheet & Leverage Analysis
The balance sheet analysis is vital to assess the financial stability and liquidity of a company. ADI's low debt ratios suggest a solid balance sheet, enhancing its capacity to maintain dividends through various economic cycles.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 0.26 | 0.22 | 0.20 |
| Debt-to-Assets | 0.18 | 0.16 | 0.14 |
| Debt-to-Capital | 0.20 | 0.18 | 0.16 |
| Net Debt to EBITDA | 1.23 | 1.35 | 0.98 |
| Current Ratio | 2.19 | 1.84 | 1.37 |
| Quick Ratio | 1.68 | 1.35 | 0.86 |
| Financial Leverage | 1.42 | 1.37 | 1.37 |
ADI's prudent leverage ratios suggest low financial risk, providing a cushion against economic downturns while supporting continued dividend disbursements.
✅ Fundamental Strength & Profitability
Evaluating profitability and return metrics are key to understanding a company's efficiency in using its resources. ADI's consistent return ratios reinforce its fundamental strength and potential for persistent dividend growth.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 6.70% | 4.65% | 9.32% |
| Return on Assets | 4.72% | 3.39% | 6.79% |
| Net Margin | 20.58% | 17.35% | 26.94% |
| EBIT Margin | 27.49% | 22.27% | 31.47% |
| EBITDA Margin | 45.63% | 44.59% | 50.11% |
| Gross Margin | 61.47% | 57.08% | 64.01% |
| R&D to Revenue | 14.90% | 15.78% | 13.49% |
With resilient margins and returns on assets and equity, ADI's profitability metrics underscore strong operational performance conducive to continued dividend growth.
Price Development 📈
🎯 Dividend Scoring System
Our dividend scoring system for ADI provides an insightful analysis that captures eight essential criteria critical to evaluating dividend quality and sustainability:
| Category | Score (1-5) | Score Bar |
|---|---|---|
| Dividend Yield | 2 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 5 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 34/40
🗣️ Rating
Analog Devices, Inc. (ADI) earns a robust dividend rating owing to its sound financial health, strong dividend history, and efficient cash flow management. While the initial yield is modest, its stability and growth prospects make it a wise choice for income-focused investors seeking reliable dividend growth. Recommended as a Buy for dividend growth portfolios.
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