ALGM vs ADI

For growth investors, Analog Devices, Inc.

(ADI) is the stronger pick with 16. 9% revenue growth year-over-year, versus -30. 9% for Allegro MicroSystems, Inc. (ALGM). Analog Devices, Inc. (ADI) offers the better valuation at 91. 2x trailing P/E (36. 4x forward), making it the more compelling value choice. Analysts rate Allegro MicroSystems, Inc. (ALGM) a "Buy" — based on 13 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On forward P/E, Analog Devices, Inc.

is actually cheaper at 36. 4x.

Over the past 5 years, Analog Devices, Inc.

(ADI) delivered a total return of +178. 6%, compared to +106. 7% for Allegro MicroSystems, Inc. (ALGM). Over 10 years, the gap is even starker: ADI returned +699. 1% versus ALGM's +190. 2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Analog Devices, Inc.

(ADI) is the lower-risk stock at 1. 44β versus Allegro MicroSystems, Inc. 's 2. 43β — meaning ALGM is approximately 68% more volatile than ADI relative to the S&P 500. On balance sheet safety, Analog Devices, Inc. (ADI) carries a lower debt/equity ratio of 26% versus 40% for Allegro MicroSystems, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Analog Devices, Inc.

(ADI) is pulling ahead at 16. 9% versus -30. 9% for Allegro MicroSystems, Inc. (ALGM). On earnings-per-share growth, the picture is similar: Analog Devices, Inc. grew EPS 39. 0% year-over-year, compared to -150. 0% for Allegro MicroSystems, Inc.. Over a 3-year CAGR, ALGM leads at -1. 9% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Analog Devices, Inc.

(ADI) is the more profitable company, earning 20. 6% net margin versus -10. 1% for Allegro MicroSystems, Inc. — meaning it keeps 20. 6% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: ADI leads at 26. 6% versus -2. 7% for ALGM. At the gross margin level — before operating expenses — ADI leads at 61. 5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

On forward earnings alone, Analog Devices, Inc.

(ADI) trades at 36. 4x forward P/E versus 96. 7x for Allegro MicroSystems, Inc. — 60. 3x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for ADI: -9. 9% to $374. 42.

In this comparison, ADI (0.

9% yield) pays a dividend. ALGM does not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, Analog Devices, Inc.

(ADI) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (0. 9% yield, +699. 1% 10Y return). Allegro MicroSystems, Inc. (ALGM) carries a higher beta of 2. 43 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (ADI: +699. 1%, ALGM: +190. 2%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: ALGM is a small-cap quality compounder stock; ADI is a large-cap high-growth stock. ADI pays a dividend while ALGM does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.