STMicroelectronics is a global independent semiconductor company engaged in development, design, production, and commercialization of semiconductor products with a focus on microelectronic applications for automotive products, computer peripherals, telecommunications systems, consumer products, and industrial automation and control systems. STMicroelectronics has a long dividend history – it pays an annual dividend of $0.34, and has been increasing its payout since 2003.
Analog Devices, on the other hand, designs, manufactures and markets a range of analog, mixed signal, and digital signal processing integrated circuits. The company’s products are integral to a large range of electronic equipment used in industrial process control systems, instrumentation and measurement systems, wireless infrastructure equipment, and aerospace and defense electronics. Analog pays a quarterly dividend of $0.34 per share.
Analog trades at a P/E ratio of 22.23, but the same ratio for STMicroelectronics is not available. However, its forward (December 2014) P/E of 12.97 is more favorable as compared with both Analog Devices Inc. (NASDAQ:ADI) (17.41) and Intersil (30.52).
Intersil Corporation (NASDAQ:ISIL) has the highest dividend yield among the three companies I have reviewed. However, on the basis of long term annual growth rates and current market price, Analog Devices looks more attractive. Moreover, Analog Devices Inc. (NASDAQ:ADI) has a history of uninterrupted profits in the last three years. Still, I would not ignore the prospects of Intersil, considering the recent change in management and that the launch of ISL6446A Dual PWM/Linear Controller considered to be the industry’s most efficient, flexible single-chip solution.
The semiconductor industry is considered to be primarily a growth sector. All three stocks look attractive on the basis of their growth potential, and the high-dividend yield should be viewed as an added advantage.
The article Three High-Dividend Semiconductor Stocks originally appeared on Fool.com and is written by Sujata Dutta.
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