You're not dreaming. Do not adjust your set. This is a true story of stable dividend yields from a technology middleweight.

Analog Devices (NYSE: ADI) is coming out of a minor business realignment with a more focused product portfolio and a stronger operating blueprint, and its rivals Texas Instruments (NYSE: TXN) and STMicroelectronics (NYSE: STM) don't look so scary anymore.

For the first quarter of 2008, Analog reported a rise of 8% in non-GAAP earnings, from $0.37 in Q1 2007 to $0.40 per diluted share. Total product revenue rose 4%, from around $591 million to about $614 million. That number gets even better if you adjust for 2007's 14-week Q1, as compared to the 13-week Q1 2008; on that basis, revenue actually increased 12%.

It's not all good news, though. Free cash flow declined from about $170 million to $137 million. And while gross margin improved from 60% to 61.2% sequentially -- primarily thanks to increased sales in the higher-margin industrial and communications segments -- that same margin declined from 61.7% to 61.2% year over year. 

In January, Analog sold off its cellular radio chips to MediaTek and divested some computer product lines to ON Semiconductor (Nasdaq: ONNN), leaving the company with a tight core of mainly signal processors and data conversion chips. The old mix of digital and analog products has boiled down to mostly analog, where management sees the greatest opportunity and strongest market position.

This is a rare tech company that has settled in for unexciting growth and a relatively stable stock -- but massive cash flows and a generous dividend. Analog rubs shoulders in an elite club that includes heavyweights Intel (Nasdaq: INTC) and Texas Instruments, and ranks among its most generous dividend payers in terms of payouts from free cash flow.

If the margin expansion continues, and Analog finds more ways to squeeze profits from its loyal analog customers, it could even resume the growth journey once again. That wouldn't really be surprising, given the global thirst for digital media -- a market in which Analog feels very, very comfortable. But if not, its dividend yield of 2.5% is better than Wal-Mart's (NYSE: WMT) 1.8% or Wrigley's (NYSE: WWY) 2.3%. Chew on that!

Wake up, Fool! There's further Foolishness ahead:

Wrigley is a Motley Fool Income Investor recommendation, and Intel and Wal-Mart are two of our Motley Fool Inside Value finds. Free 30-day trials for everybody!

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure always pays great dividends.