Financial Review: Analog Devices (NASDAQ:ADI) vs. IPG Photonics (NASDAQ:IPGP)

Analog Devices (NASDAQ:ADI) and IPG Photonics (NASDAQ:IPGP) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Analog Devices and IPG Photonics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Analog Devices	0	6	18	0	2.75
IPG Photonics	1	1	3	1	2.67

Analog Devices presently has a consensus target price of $243.23, suggesting a potential upside of 8.01%. IPG Photonics has a consensus target price of $110.40, suggesting a potential upside of 32.49%. Given IPG Photonics’ higher possible upside, analysts plainly believe IPG Photonics is more favorable than Analog Devices.

Volatility & Risk

Analog Devices has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, IPG Photonics has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Insider and Institutional Ownership

86.8% of Analog Devices shares are held by institutional investors. Comparatively, 93.8% of IPG Photonics shares are held by institutional investors. 0.3% of Analog Devices shares are held by insiders. Comparatively, 38.0% of IPG Photonics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Analog Devices and IPG Photonics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Analog Devices	20.45%	10.74%	7.82%
IPG Photonics	15.34%	7.67%	6.86%

Earnings and Valuation

This table compares Analog Devices and IPG Photonics’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Analog Devices	$12.31 billion	9.08	$3.31 billion	$4.28	52.61
IPG Photonics	$1.29 billion	2.95	$218.88 million	$3.88	21.48

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

Summary

Analog Devices beats IPG Photonics on 11 of the 15 factors compared between the two stocks.

About Analog Devices

Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia. The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and consumer markets; and power ICs that include performance, integration, and software design simulation tools for accurate power supply designs. It also offers amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and micro-electro-mechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators. In addition, the company provides digital signal processing and system products for numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, defense and healthcare, and communications markets through a direct sales force, third-party distributors, and independent sales representatives, as well as online. Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.

About IPG Photonics

IPG Photonics Corporation develops, manufactures, and sells various high-performance fiber lasers, fiber amplifiers, and diode lasers used in various applications primarily in materials processing worldwide. Its laser products include hybrid fiber-solid state lasers with green and ultraviolet wavelengths; fiber pigtailed packaged diodes and fiber coupled direct diode laser systems; high-energy pulsed lasers, multi-wavelength and tunable lasers, and single-polarization and single-frequency lasers; and high-power optical fiber delivery cables, fiber couplers, beam switches, chillers, scanners, and other accessories. The company also offers integrated laser systems; LightWELD, a handheld laser welding system; 2D compact flat sheet cutter systems and multi-axis systems for fine welding, cutting, and drilling; welding seam stepper and picker, a fiber laser welding tool; high precision laser systems; specialized fiber laser systems for material processing applications; robotic and multi-axis workstations for welding, cutting and cladding, flatbed cutting systems, and diode markers; and laser and non-laser robotic welding and automation solutions. It serves materials processing, communications, medical procedures, and advanced applications and communications markets. The company markets its products to original equipment manufacturers, system integrators, and end users through direct sales force, as well as through agreements with independent sales representatives and distributors. IPG Photonics Corporation was founded in 1990 and is headquartered in Marlborough, Massachusetts.