ADI vs. ARM: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at ADI and ARM, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
ADI’s market capitalization stands at 121.92 billion USD, while ARM’s is 163.93 billion USD, indicating their market valuations are broadly comparable.
ARM carries a higher beta at 4.10, indicating it’s more sensitive to market moves, while ADI (beta: 1.00) exhibits greater stability.
ARM is an American Depositary Receipt (ADR), allowing U.S. investors direct exposure to its non-U.S. operations. ADI, on the other hand, is a domestic entity.
| Symbol | ADI | ARM |
|---|---|---|
| Company Name | Analog Devices, Inc. | Arm Holdings plc American Depositary Shares |
| Country | US | GB |
| Sector | Technology | Technology |
| Industry | Semiconductors | Semiconductors |
| CEO | Vincent T. Roche | Rene Anthony Andrada Haas |
| Price | 245.68 USD | 155.09 USD |
| Market Cap | 121.92 billion USD | 163.93 billion USD |
| Beta | 1.00 | 4.10 |
| Exchange | NASDAQ | NASDAQ |
| IPO Date | March 17, 1980 | September 14, 2023 |
| ADR | No | Yes |
Historical Performance
This chart compares the performance of ADI and ARM by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
ADI
5.22%
Semiconductors Industry
- Max
- 41.84%
- Q3
- 15.81%
- Median
- 6.31%
- Q1
- -5.54%
- Min
- -30.12%
ADI’s Return on Equity of 5.22% is on par with the norm for the Semiconductors industry, indicating its profitability relative to shareholder equity is typical for the sector.
ARM
12.71%
Semiconductors Industry
- Max
- 41.84%
- Q3
- 15.81%
- Median
- 6.31%
- Q1
- -5.54%
- Min
- -30.12%
ARM’s Return on Equity of 12.71% is on par with the norm for the Semiconductors industry, indicating its profitability relative to shareholder equity is typical for the sector.
Return on Invested Capital
ADI
4.52%
Semiconductors Industry
- Max
- 30.91%
- Q3
- 11.34%
- Median
- 4.08%
- Q1
- -2.17%
- Min
- -19.59%
ADI’s Return on Invested Capital of 4.52% is in line with the norm for the Semiconductors industry, reflecting a standard level of efficiency in generating profits from its capital base.
ARM
11.37%
Semiconductors Industry
- Max
- 30.91%
- Q3
- 11.34%
- Median
- 4.08%
- Q1
- -2.17%
- Min
- -19.59%
In the upper quartile for the Semiconductors industry, ARM’s Return on Invested Capital of 11.37% signifies a highly effective use of its capital to generate profits when compared to its peers.
Net Profit Margin
ADI
18.65%
Semiconductors Industry
- Max
- 51.69%
- Q3
- 19.67%
- Median
- 8.56%
- Q1
- -5.44%
- Min
- -38.60%
ADI’s Net Profit Margin of 18.65% is aligned with the median group of its peers in the Semiconductors industry. This indicates its ability to convert revenue into profit is typical for the sector.
ARM
19.77%
Semiconductors Industry
- Max
- 51.69%
- Q3
- 19.67%
- Median
- 8.56%
- Q1
- -5.44%
- Min
- -38.60%
A Net Profit Margin of 19.77% places ARM in the upper quartile for the Semiconductors industry, signifying strong profitability and more effective cost management than most of its peers.
Operating Profit Margin
ADI
22.71%
Semiconductors Industry
- Max
- 58.03%
- Q3
- 22.12%
- Median
- 8.40%
- Q1
- -3.73%
- Min
- -36.14%
An Operating Profit Margin of 22.71% places ADI in the upper quartile for the Semiconductors industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.
ARM
20.74%
Semiconductors Industry
- Max
- 58.03%
- Q3
- 22.12%
- Median
- 8.40%
- Q1
- -3.73%
- Min
- -36.14%
ARM’s Operating Profit Margin of 20.74% is around the midpoint for the Semiconductors industry, indicating that its efficiency in managing core business operations is typical for the sector.
Profitability at a Glance
| Symbol | ADI | ARM |
|---|---|---|
| Return on Equity (TTM) | 5.22% | 12.71% |
| Return on Assets (TTM) | 3.87% | 8.87% |
| Return on Invested Capital (TTM) | 4.52% | 11.37% |
| Net Profit Margin (TTM) | 18.65% | 19.77% |
| Operating Profit Margin (TTM) | 22.71% | 20.74% |
| Gross Profit Margin (TTM) | 56.84% | 95.83% |
Financial Strength
Current Ratio
ADI
2.08
Semiconductors Industry
- Max
- 9.10
- Q3
- 5.23
- Median
- 3.09
- Q1
- 2.49
- Min
- 1.02
ADI’s Current Ratio of 2.08 falls into the lower quartile for the Semiconductors industry. This indicates a tighter liquidity situation and a more constrained capacity to handle short-term debt than many of its competitors.
ARM
5.20
Semiconductors Industry
- Max
- 9.10
- Q3
- 5.23
- Median
- 3.09
- Q1
- 2.49
- Min
- 1.02
ARM’s Current Ratio of 5.20 aligns with the median group of the Semiconductors industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio
ADI
0.21
Semiconductors Industry
- Max
- 0.97
- Q3
- 0.46
- Median
- 0.21
- Q1
- 0.05
- Min
- 0.00
ADI’s Debt-to-Equity Ratio of 0.21 is typical for the Semiconductors industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
ARM
0.05
Semiconductors Industry
- Max
- 0.97
- Q3
- 0.46
- Median
- 0.21
- Q1
- 0.05
- Min
- 0.00
ARM’s Debt-to-Equity Ratio of 0.05 is typical for the Semiconductors industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
Interest Coverage Ratio
ADI
7.01
Semiconductors Industry
- Max
- 36.25
- Q3
- 29.12
- Median
- 7.01
- Q1
- -1.22
- Min
- -18.18
ADI’s Interest Coverage Ratio of 7.01 is positioned comfortably within the norm for the Semiconductors industry, indicating a standard and healthy capacity to cover its interest payments.
ARM
--
Semiconductors Industry
- Max
- 36.25
- Q3
- 29.12
- Median
- 7.01
- Q1
- -1.22
- Min
- -18.18
Interest Coverage Ratio data for ARM is currently unavailable.
Financial Strength at a Glance
| Symbol | ADI | ARM |
|---|---|---|
| Current Ratio (TTM) | 2.08 | 5.20 |
| Quick Ratio (TTM) | 1.51 | 5.20 |
| Debt-to-Equity Ratio (TTM) | 0.21 | 0.05 |
| Debt-to-Asset Ratio (TTM) | 0.15 | 0.04 |
| Net Debt-to-EBITDA Ratio (TTM) | 1.25 | -2.31 |
| Interest Coverage Ratio (TTM) | 7.01 | -- |
Growth
The following charts compare key year-over-year (YoY) growth metrics for ADI and ARM. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
ADI
1.55%
Semiconductors Industry
- Max
- 6.48%
- Q3
- 0.93%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
With a Dividend Yield of 1.55%, ADI offers a more attractive income stream than most of its peers in the Semiconductors industry, signaling a strong commitment to shareholder returns.
ARM
0.00%
Semiconductors Industry
- Max
- 6.48%
- Q3
- 0.93%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ARM currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
Dividend Payout Ratio
ADI
101.60%
Semiconductors Industry
- Max
- 204.29%
- Q3
- 31.85%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ADI’s Dividend Payout Ratio of 101.60% is above 100%. This means the company is paying out more in dividends than it earned, a practice that is often unsustainable and could indicate a risk to future dividend stability.
ARM
0.00%
Semiconductors Industry
- Max
- 204.29%
- Q3
- 31.85%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ARM has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
Dividend at a Glance
| Symbol | ADI | ARM |
|---|---|---|
| Dividend Yield (TTM) | 1.55% | 0.00% |
| Dividend Payout Ratio (TTM) | 101.60% | 0.00% |
Valuation
Price-to-Earnings Ratio
ADI
66.56
Semiconductors Industry
- Max
- 86.15
- Q3
- 47.38
- Median
- 27.87
- Q1
- 18.89
- Min
- 4.73
A P/E Ratio of 66.56 places ADI in the upper quartile for the Semiconductors industry. This high valuation relative to peers suggests the market holds elevated expectations for the company’s future growth.
ARM
206.59
Semiconductors Industry
- Max
- 86.15
- Q3
- 47.38
- Median
- 27.87
- Q1
- 18.89
- Min
- 4.73
At 206.59, ARM’s P/E Ratio is exceptionally high, exceeding the typical maximum for the Semiconductors industry. This suggests the stock may be significantly overvalued compared to its peers and implies high market expectations that could be difficult to meet.
Forward P/E to Growth Ratio
ADI
4.01
Semiconductors Industry
- Max
- 4.73
- Q3
- 2.80
- Median
- 1.11
- Q1
- 0.68
- Min
- 0.01
The Forward PEG Ratio is often not a primary valuation metric in the Semiconductors industry.
ARM
7.75
Semiconductors Industry
- Max
- 4.73
- Q3
- 2.80
- Median
- 1.11
- Q1
- 0.68
- Min
- 0.01
The Forward PEG Ratio is often not a primary valuation metric in the Semiconductors industry.
Price-to-Sales Ratio
ADI
12.42
Semiconductors Industry
- Max
- 21.96
- Q3
- 10.21
- Median
- 4.45
- Q1
- 2.32
- Min
- 0.48
ADI’s P/S Ratio of 12.42 is in the upper echelon for the Semiconductors industry. This means the company is valued richly on its revenue stream compared to its peers, suggesting the stock is priced for a high level of future performance.
ARM
40.91
Semiconductors Industry
- Max
- 21.96
- Q3
- 10.21
- Median
- 4.45
- Q1
- 2.32
- Min
- 0.48
With a P/S Ratio of 40.91, ARM trades at a valuation that eclipses even the highest in the Semiconductors industry. This implies the market has priced in exceptionally optimistic scenarios for future revenue growth, posing considerable valuation risk.
Price-to-Book Ratio
ADI
3.48
Semiconductors Industry
- Max
- 13.12
- Q3
- 6.49
- Median
- 3.31
- Q1
- 1.74
- Min
- 0.23
ADI’s P/B Ratio of 3.48 is within the conventional range for the Semiconductors industry. This shows a balanced market view, where the stock’s price is neither at a significant premium nor a discount to the book value of its peers.
ARM
23.92
Semiconductors Industry
- Max
- 13.12
- Q3
- 6.49
- Median
- 3.31
- Q1
- 1.74
- Min
- 0.23
At 23.92, ARM’s P/B Ratio is at an extreme premium to the Semiconductors industry. This signifies that the market’s valuation is heavily reliant on future potential rather than its current net asset value, which can be a high-risk proposition.
Valuation at a Glance
| Symbol | ADI | ARM |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 66.56 | 206.59 |
| Forward PEG Ratio (TTM) | 4.01 | 7.75 |
| Price-to-Sales Ratio (P/S, TTM) | 12.42 | 40.91 |
| Price-to-Book Ratio (P/B, TTM) | 3.48 | 23.92 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 37.02 | 1011.91 |
| EV-to-EBITDA (TTM) | 32.84 | 216.85 |
| EV-to-Sales (TTM) | 12.91 | 40.48 |