Analog Devices, Inc. (ADI), AT&T Inc. (T), China Mobile Ltd. (ADR) (CHL): A Recovering Communications Business Is Making This Company Better

Analog Devices, Inc. (NASDAQ:ADI) is optimistic about the future of its communications business and activity in the end market suggests that there are enough opportunities for growth.

All-around growth
With the communications infrastructure segment looking set for a rebound, Analog Devices will be in a better position to grow since its industrial and automotive businesses have already been doing well. The industrial semiconductor market has been doing well and according to IHS, sales of industrial electronics chips increased slightly in the first quarter to $7.71 billion.

The research firm stated that chipmakers are seeing leaner inventories on the back of strong orders from customers, and Analog Devices’ management also echoed the same sentiment over the previous conference call.

In the automotive market as well, the company expects the proliferation of advanced safety features and use of higher electronic content for various applications such as in-car infotainment to increase its addressable market.

Final words
The weak performance of Analog Devices’ communications business has weighed on the company so far this year, but with things looking up in the segment, the company would probably do better going forward.

With a trailing P/E of 22, Analog Devices trades slightly below the industry average of 23 , so investors won’t be paying a very high price for the stock. Moreover, a decent dividend yield of 2.90% and a diversified business are some more reasons why Analog Devices looks like a good investment.

The article A Recovering Communications Business Is Making This Company Better originally appeared on Fool.com and is written by Harsh Chauhan.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool owns shares of China Mobile.

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