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ADI (Analog Devices) Forward Rate of Return (Yacktman) % : 17.50% (As of Jul. 2024)


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What is Analog Devices Forward Rate of Return (Yacktman) %?

Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Analog Devices's forward rate of return for was 17.50%.

The historical rank and industry rank for Analog Devices's Forward Rate of Return (Yacktman) % or its related term are showing as below:

ADI' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 0.09   Med: 14.31   Max: 24.67
Current: 17.51

During the past 13 years, Analog Devices's highest Forward Rate of Return was 24.67. The lowest was 0.09. And the median was 14.31.

ADI's Forward Rate of Return (Yacktman) % is ranked better than
64.5% of 555 companies
in the Semiconductors industry
Industry Median: 11.59 vs ADI: 17.51

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


Analog Devices Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for Analog Devices's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Analog Devices Forward Rate of Return (Yacktman) % Chart

Analog Devices Annual Data
Trend Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21 Oct22 Oct23
Forward Rate of Return (Yacktman) %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 23.70 21.52 12.75 9.91 17.57

Analog Devices Quarterly Data
Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24 Jul24
Forward Rate of Return (Yacktman) % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 14.35 17.57 18.28 18.51 17.50

Competitive Comparison of Analog Devices's Forward Rate of Return (Yacktman) %

For the Semiconductors subindustry, Analog Devices's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Analog Devices's Forward Rate of Return (Yacktman) % Distribution in the Semiconductors Industry

For the Semiconductors industry and Technology sector, Analog Devices's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where Analog Devices's Forward Rate of Return (Yacktman) % falls into.



Analog Devices Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

Analog Devices's Forward Rate of Return of Jul. 2024 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=6.19733333/231.38+0.1482
=17.50 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Analog Devices  (NAS:ADI) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.


Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.


Analog Devices Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of Analog Devices's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


Analog Devices Business Description

Industry
Address
One Analog Way, Wilmington, MA, USA, 01887
Analog Devices is a leading analog, mixed signal, and digital signal processing chipmaker. The firm has a significant market share lead in converter chips, which are used to translate analog signals to digital and vice versa. The company serves tens of thousands of customers, and more than half of its chip sales are made to industrial and automotive end markets. Analog Devices' chips are also incorporated into wireless infrastructure equipment.
Executives
Vincent Roche officer: V.P., WORLDWIDE SALES
Edward H. Frank director C/O FUSION-IO, INC., 2855 E. COTTONWOOD PARKWAY, SUITE 100, SALT LAKE CITY UT 84121
Gregory M Bryant officer: Executive Vice President 2200 MISSION COLLEGE BLVD, SANTA CLARA CA 95054
James Champy director C/O PEROT SYSTEMS CORP, 2300 WEST PLANO PKWY, PLANO TX 75075
Michael Sondel officer: CAO (principal acct. officer) ONE TECHNOLOGY WAY, NORWOOD MA 02062
Vivek Jain officer: SVP, Global Operations 120 SAN GABRIEL DRIVE, SUNNYVALE CA 94086
James Michael Mollica officer: Interim CFO C/O ANALOG DEVICES, INC., ONE ANALOG WAY, WILMINGTON MA 01887
Prashanth Mahendra-rajah officer: SVP, Finance & CFO C/O WABCO HOLDINGS INC., ONE CENTENNIAL AVENUE, PISCATAWAY NJ 08855
Kenton J Sicchitano director ONE TECHNOLOGY WAY, C/O ANALOG DEVICES, INC., NORWOOD MA 02062
Stephen M Jennings director LTX CORPORATION, UNIVERSITY AVE, WESTWOOD MA 02090
Tunc Doluca director
Ray Stata director, officer: CHAIRMAN
Andre' Andonian director ONE ANALOG WAY, WILMINGTON MA 01887
Bruce R Evans director C/O SUMMIT PARTNERS, 222 BERKELEY STREET, 18TH FLOOR, BOSTON MA 02116
Mercedes Johnson director MICRON TECHNOLOGY, INC, 8000 S FEDERAL WAY, MS 1-557, BOISE ID 83716