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Analog Devices (ADI) and Wal-Mart (WMT): Growth & Income Stocks
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Analog Devices (ADI - Free Report) has had an impressive year as they beat both top and bottom line expectations for the 13th consecutive quarter.But this most recent quarter was one of the most impressive as revenues grew by +54% year over year with EPS growth of +38%.Further, the company now controls about +10% of the $40 billion world’s market share in the analog segment.
Outside of internal innovation, the company has recently made two key acquisitions that have already begun to positively impact both the top and bottom lines.In June, Analog acquired Hittite Microwave Corp (HITT) to complement its Radio Frequency (RF) and signal conversion expertise.Then in July, management announced the acquisition of Linear Technology to increase its presence and portfolio of products in the industrial, communications infrastructure, and automotive sectors.
In order to integrate these two new companies within Analog, the board of directors hired a new CFO, Prashanth Mahendra-Rajah.Prashanth has a solid track record in finance and integration experience.Outside of the integration, he has stated that he is also focused on both operational and spending discipline especially within the engineering segment.
Mr. Mahendra-Rajah’s leadership has already begun to pay dividends for the company and its shareholders, as management increased both earnings and revenue estimates for the next quarter, and is now expecting long-term EPS growth between 8-15%.Another tailwind for the company is the continuation of high demand for semiconductors and analog devices.
This sustained success can be seen in the company’s Price and Earnings Consensus graph below.As you can see the stock price has been on an uptick since the beginning of 2016, and annual earnings estimates have risen as well.
Further, earnings estimates have risen for Q1 18, Q2 18, FY 18, and FY 19 over the past 60 days; Q1 18 rose from $1.16 to $1.29, Q2 18 improved from $1.19 to $1.26, FY 18 jumped up from $4.96 to $5.24, and FY 19 was increased from $5.42 to $5.64.
Also, management has stated that they intend to return 80% of annual free cash flows to shareholders. This has been reflected in its solid +2.03% annual dividend payment.
Wal-Mart (WMT - Free Report) . Management’s focus on both its stores and its ecommerce sales has produced impressive earnings data over the past several quarters. The company recently produced its 13th consecutive quarter of positive comparable store sales, and its 12th consecutive quarter of positive comparable store traffic. The company has remodeled many of its existing stores, opened hundreds of new stores, and closed several underperforming locations over the past year. Further, management has commented that another reason for consistent traffic, and sales has been it grocery segment, which is gaining traction in all regions.
Further, Wal-Mart has seen sales increase domestically, internationally, and at their Sam’s Club locations. Specifically, on the international front, 10 out of their 11 regions saw sales growth in the last quarter with Mexico, and China stores seeing the biggest gains.
The company has also been concentrating on its ecommerce presence, and last year they acquired Jet.com to bolster this area and compete against amazon.com. The integration between the two sites has begun to produce strong results as U.S. ecommerce sales rose by +50%, and margins are continuing to expand. Further, gross merchandise volumes (GMV) gained 54% YoY, and total revenues grew by +4.2%. Due to these positive results, management increased EPS guidance for fiscal year 2018 from a range of $4.30-4.40 to $4.38-4.46.
This stock has been on fire as of late, as you can see in the Price and Earnings Consensus Graph below.
Wal-Mart also has a huge dividend repurchase program where they bought about $2.2 billion worth of shares, and returned almost $1.5 billion in dividends in just the last quarter. Currently, WMT has an annual dividend yield of +2.07%.
Zacks’ Best Private Investment Ideas
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Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Analog Devices (ADI) and Wal-Mart (WMT): Growth & Income Stocks
Analog Devices (ADI - Free Report) has had an impressive year as they beat both top and bottom line expectations for the 13th consecutive quarter. But this most recent quarter was one of the most impressive as revenues grew by +54% year over year with EPS growth of +38%. Further, the company now controls about +10% of the $40 billion world’s market share in the analog segment.
Outside of internal innovation, the company has recently made two key acquisitions that have already begun to positively impact both the top and bottom lines. In June, Analog acquired Hittite Microwave Corp (HITT) to complement its Radio Frequency (RF) and signal conversion expertise. Then in July, management announced the acquisition of Linear Technology to increase its presence and portfolio of products in the industrial, communications infrastructure, and automotive sectors.
In order to integrate these two new companies within Analog, the board of directors hired a new CFO, Prashanth Mahendra-Rajah. Prashanth has a solid track record in finance and integration experience. Outside of the integration, he has stated that he is also focused on both operational and spending discipline especially within the engineering segment.
Mr. Mahendra-Rajah’s leadership has already begun to pay dividends for the company and its shareholders, as management increased both earnings and revenue estimates for the next quarter, and is now expecting long-term EPS growth between 8-15%. Another tailwind for the company is the continuation of high demand for semiconductors and analog devices.
This sustained success can be seen in the company’s Price and Earnings Consensus graph below. As you can see the stock price has been on an uptick since the beginning of 2016, and annual earnings estimates have risen as well.
Analog Devices, Inc. Price and Consensus
Analog Devices, Inc. Price and Consensus | Analog Devices, Inc. Quote
Further, earnings estimates have risen for Q1 18, Q2 18, FY 18, and FY 19 over the past 60 days; Q1 18 rose from $1.16 to $1.29, Q2 18 improved from $1.19 to $1.26, FY 18 jumped up from $4.96 to $5.24, and FY 19 was increased from $5.42 to $5.64.
Also, management has stated that they intend to return 80% of annual free cash flows to shareholders. This has been reflected in its solid +2.03% annual dividend payment.
Wal-Mart (WMT - Free Report) . Management’s focus on both its stores and its ecommerce sales has produced impressive earnings data over the past several quarters. The company recently produced its 13th consecutive quarter of positive comparable store sales, and its 12th consecutive quarter of positive comparable store traffic. The company has remodeled many of its existing stores, opened hundreds of new stores, and closed several underperforming locations over the past year. Further, management has commented that another reason for consistent traffic, and sales has been it grocery segment, which is gaining traction in all regions.
Further, Wal-Mart has seen sales increase domestically, internationally, and at their Sam’s Club locations. Specifically, on the international front, 10 out of their 11 regions saw sales growth in the last quarter with Mexico, and China stores seeing the biggest gains.
The company has also been concentrating on its ecommerce presence, and last year they acquired Jet.com to bolster this area and compete against amazon.com. The integration between the two sites has begun to produce strong results as U.S. ecommerce sales rose by +50%, and margins are continuing to expand. Further, gross merchandise volumes (GMV) gained 54% YoY, and total revenues grew by +4.2%. Due to these positive results, management increased EPS guidance for fiscal year 2018 from a range of $4.30-4.40 to $4.38-4.46.
This stock has been on fire as of late, as you can see in the Price and Earnings Consensus Graph below.
Wal-Mart Stores, Inc. Price and Consensus
Wal-Mart Stores, Inc. Price and Consensus | Wal-Mart Stores, Inc. Quote
Wal-Mart also has a huge dividend repurchase program where they bought about $2.2 billion worth of shares, and returned almost $1.5 billion in dividends in just the last quarter. Currently, WMT has an annual dividend yield of +2.07%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>