In the fast-paced world of semiconductors, Texas Instruments Incorporated (TXN) and Analog Devices, Inc. (ADI) stand out as key players. Both companies operate in the same industry, focusing on innovation and technology, yet they adopt distinct strategies to capture market share. By examining their approaches, financial health, and growth potential, I aim to highlight which company might be the more compelling investment opportunity for you. Let’s dive into the details and uncover the most interesting choice for your portfolio.
Table of contents
Company Overview
Texas Instruments Incorporated Overview
Texas Instruments (TXN), headquartered in Dallas, Texas, is a leading designer and manufacturer of semiconductors, specializing in both Analog and Embedded Processing segments. With a market capitalization of approximately $153B, Texas Instruments focuses on power management solutions and signal chain products, catering to a diverse range of industries, including industrial, automotive, and personal electronics. Founded in 1930, the company has built a strong reputation for its innovative technologies and commitment to quality, evidenced by its extensive product offerings that include microcontrollers, digital signal processors, and DLP products. TXN’s dedication to research and development has positioned it as a key player in the technology sector, appealing to electronics designers and manufacturers worldwide.
Analog Devices, Inc. Overview
Analog Devices (ADI), based in Wilmington, Massachusetts, is a prominent player in the semiconductor industry, with a market cap of around $131B. The company specializes in integrated circuits and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. Established in 1965, Analog Devices is recognized for its advanced data converter products, power management solutions, and high-performance amplifiers, primarily serving the automotive, industrial, and consumer markets. With a strong emphasis on innovation and customer solutions, ADI has earned a solid reputation for quality and reliability, driving its growth in various high-tech applications.
Key similarities and differences
Both Texas Instruments and Analog Devices operate in the semiconductor industry and share a commitment to innovation and quality. However, while TXN focuses more on power management and signal chain products, ADI emphasizes integrated circuits and mixed-signal processing solutions. Their distinct product lines cater to overlapping yet specialized markets, illustrating both their competitive and complementary nature in the sector.
Income Statement Comparison
The following table presents a comparison of key income statement metrics for Texas Instruments Incorporated and Analog Devices, Inc. for the most recent fiscal year.
| Metric | Texas Instruments (TXN) | Analog Devices (ADI) |
|---|---|---|
| Market Cap | 153B | 131B |
| Revenue | 15.64B | 11.02B |
| EBITDA | 7.54B | 5.03B |
| EBIT | 5.96B | 3.03B |
| Net Income | 4.80B | 2.27B |
| EPS | 5.24 | 4.59 |
| Fiscal Year | 2024 | 2025 |
Interpretation of Income Statement
In the most recent fiscal year, Texas Instruments (TXN) experienced a decline in revenue from 17.52B in 2023 to 15.64B in 2024, reflecting a decrease in demand amid a challenging market. Consequently, net income also fell from 6.51B to 4.80B, indicating tightening profit margins. Conversely, Analog Devices (ADI) reported a revenue increase to 11.02B in 2025, leading to a net income growth of 2.27B, showcasing stronger performance and improved operational efficiency. This divergence highlights the contrasting market positions and resilience of the two companies in the semiconductor space.
Financial Ratios Comparison
The following table provides a comparative overview of the most recent revenue and key financial ratios for Texas Instruments (TXN) and Analog Devices (ADI).
| Metric | TXN | ADI |
|---|---|---|
| ROE | 28.39% | 6.70% |
| ROIC | 14.75% | 5.55% |
| P/E | 35.63 | 51.05 |
| P/B | 10.12 | 3.42 |
| Current Ratio | 4.12 | 2.19 |
| Quick Ratio | 2.88 | 1.68 |
| D/E | 0.80 | 0.25 |
| Debt-to-Assets | 38.29% | 17.90% |
| Interest Coverage | 10.76 | 9.45 |
| Asset Turnover | 0.44 | 0.23 |
| Fixed Asset Turnover | 1.38 | N/A |
| Payout Ratio | 99.92% | 84.88% |
| Dividend Yield | 2.80% | 1.66% |
Interpretation of Financial Ratios
Texas Instruments exhibits significantly higher return on equity (ROE) and return on invested capital (ROIC), demonstrating better efficiency in generating profits from shareholders’ equity. Its current and quick ratios indicate strong liquidity, while ADI’s lower ratios suggest potential liquidity concerns. However, ADI’s lower debt-to-assets ratio reflects a more conservative leverage approach. The high payout ratios for both companies indicate substantial dividends, which could appeal to income-focused investors but may raise concerns about future growth reinvestments.
Dividend and Shareholder Returns
Texas Instruments (TXN) maintains a robust dividend policy, showcasing a dividend yield of 2.8% and a payout ratio of approximately 99.9%. However, this high payout ratio raises concerns about sustainability, especially given their free cash flow coverage. In contrast, Analog Devices (ADI) offers a lower yield of 1.7% with a dividend payout ratio of about 85%. Both firms engage in share buyback programs, indicating a commitment to returning value to shareholders. Overall, the dividend strategies of these companies reflect their focus on providing long-term shareholder value, albeit with varying degrees of risk.
Strategic Positioning
Texas Instruments (TXN) and Analog Devices (ADI) are key players in the semiconductor market, with market caps of approximately $153B and $131B, respectively. TXN focuses heavily on analog and embedded processing, while ADI excels in data conversion and mixed-signal technologies. Competitive pressure remains robust, with both firms innovating to mitigate risks from technological disruptions. Market share dynamics suggest a close contest for leadership, making strategic positioning crucial for sustained growth.
Stock Comparison
In examining the weekly stock price movements for Texas Instruments (TXN) and Analog Devices (ADI), we observe significant fluctuations and trading dynamics over the past year, with notable price changes reflecting their respective market performances.
Trend Analysis
Texas Instruments (TXN) has experienced a price change of +1.92% over the past year, indicating a bullish trend despite a recent decline of -7.85% in the last few months from September 14, 2025, to November 30, 2025. The stock’s highest price reached 221.25, while the lowest was 147.6, suggesting a volatility with a standard deviation of 16.88. The trend shows signs of deceleration, reflecting a slower rate of price increase.
Analog Devices (ADI), on the other hand, reports a robust price change of +42.24% over the same period, also confirming a bullish trend. In the recent analysis period from September 14, 2025, to November 30, 2025, ADI posted a price increase of +8.21%, with a standard deviation of 10.16. The stock reached a high of 265.34 and a low of 164.6, indicating significant volatility but maintaining a strong overall performance. Similar to TXN, ADI’s trend is marked by deceleration, suggesting a gradual slowdown in the pace of growth.
Both companies show increasing volume trends, with TXN displaying a seller-dominant behavior during the recent period, while ADI has a slightly seller-dominant stance.
Analyst Opinions
Recent analyst recommendations for Texas Instruments (TXN) and Analog Devices (ADI) show a consensus rating of “Buy.” Analysts note TXN’s strong return on equity (5) and return on assets (5), indicating solid operational efficiency, while ADI benefits from a higher discounted cash flow score (4) reflecting its growth potential. Notable analysts suggest that both companies are well-positioned to capitalize on the growing demand for semiconductors, contributing to their positive outlook. Overall, the consensus for 2025 remains bullish, suggesting that investors may want to consider adding these stocks to their portfolios.
Stock Grades
Investors can utilize the latest stock ratings to better inform their investment strategies. Here are the current grades for Texas Instruments and Analog Devices:
Texas Instruments Incorporated Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Susquehanna | maintain | Positive | 2025-10-22 |
| Wells Fargo | maintain | Equal Weight | 2025-10-22 |
| Truist Securities | maintain | Hold | 2025-10-22 |
| Rosenblatt | maintain | Buy | 2025-10-22 |
| Goldman Sachs | maintain | Buy | 2025-10-22 |
| JP Morgan | maintain | Overweight | 2025-10-22 |
| Cantor Fitzgerald | maintain | Neutral | 2025-10-22 |
| Stifel | maintain | Hold | 2025-10-22 |
| TD Cowen | maintain | Buy | 2025-10-22 |
| Mizuho | downgrade | Underperform | 2025-10-20 |
Analog Devices, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | maintain | Overweight | 2025-11-26 |
| JP Morgan | maintain | Overweight | 2025-11-26 |
| Evercore ISI Group | maintain | Outperform | 2025-11-26 |
| Benchmark | maintain | Buy | 2025-11-26 |
| B of A Securities | maintain | Buy | 2025-11-26 |
| Baird | maintain | Outperform | 2025-11-26 |
| Wells Fargo | maintain | Equal Weight | 2025-11-26 |
| Truist Securities | maintain | Hold | 2025-11-26 |
| Cantor Fitzgerald | maintain | Overweight | 2025-09-30 |
| Benchmark | maintain | Buy | 2025-08-21 |
Overall, both Texas Instruments and Analog Devices exhibit a stable trend in their stock grades, with several maintained “Buy” and “Overweight” ratings. However, Texas Instruments did receive a downgrade from Mizuho, which investors should consider when evaluating their positions.
Target Prices
Based on the latest analysis, here’s the target consensus for Texas Instruments Incorporated (TXN) and Analog Devices, Inc. (ADI).
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Texas Instruments (TXN) | 245 | 145 | 190.45 |
| Analog Devices (ADI) | 300 | 258 | 283.58 |
For Texas Instruments, the target consensus of 190.45 suggests a potential upside compared to its current price of 168.15. Meanwhile, Analog Devices has a consensus target of 283.58, indicating a favorable outlook from analysts relative to its current price of 265.34.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of Texas Instruments Incorporated (TXN) and Analog Devices, Inc. (ADI) based on recent financial data.
| Criterion | Texas Instruments (TXN) | Analog Devices (ADI) |
|---|---|---|
| Diversification | Strong product range across sectors | Focused on high-performance analog and mixed-signal devices |
| Profitability | Net profit margin: 30.68% | Net profit margin: 20.58% |
| Innovation | Significant R&D investment | High R&D expenditure, strong patent portfolio |
| Global presence | Operations in over 30 countries | Established presence in key global markets |
| Market Share | Leading in analog semiconductors | Strong competitor in the mixed-signal market |
| Debt level | Debt-to-equity ratio: 0.80 | Debt-to-equity ratio: 0.25 |
Key takeaways: Texas Instruments showcases robust profitability and diversification, while Analog Devices excels in innovation and maintaining a lower debt level, making both companies appealing to investors with varying strategies.
Risk Analysis
The following table outlines the key risks faced by Texas Instruments (TXN) and Analog Devices (ADI) to help you assess their relative robustness.
| Metric | Texas Instruments (TXN) | Analog Devices (ADI) |
|---|---|---|
| Market Risk | Moderate | High |
| Regulatory Risk | Low | Moderate |
| Operational Risk | Moderate | Moderate |
| Environmental Risk | Low | High |
| Geopolitical Risk | Moderate | High |
Both companies face significant market and operational risks, particularly in a volatile economic environment. Analog Devices has heightened exposure to environmental and geopolitical risks, which could impact its supply chain and operational efficacy.
Which one to choose?
In comparing Texas Instruments (TXN) and Analog Devices (ADI), both companies exhibit solid fundamentals. TXN shows a higher revenue of $15.64B in 2024, with a net profit margin of 30.68%, while ADI’s revenue stands at $11.02B with a profit margin of 20.54%. Ratios indicate TXN’s price-to-earnings ratio at 35.63 versus ADI’s 51.05, suggesting that TXN might be more attractively valued. Both stocks are rated ‘B’ by analysts, indicating a neutral outlook. From a technical perspective, TXN’s stock trend remains bullish with a 1.92% price change, while ADI has seen a remarkable 42.24% increase over the same timeframe, though its recent price change reflects a deceleration.
Investors focused on growth may prefer ADI due to its impressive stock performance, while those prioritizing stability might favor TXN for its solid income metrics. However, both stocks face risks from market competition and valuation pressures.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Texas Instruments Incorporated and Analog Devices, Inc. to enhance your investment decisions:
