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As a shareholder-friendly measure, Applied Materials (AMAT - Free Report) recently announced a hike in dividend payout. The move reflects the company’s sound financial position and intention to utilize free cash for enhancing shareholders’ returns.
It raised quarterly dividend by 9.1% to 24 cents per share from 22 cents. This new dividend, approved by its board of directors, will be paid on Jun 17, 2021 to stockholders of record as of May 27.
We believe that its portfolio strength, robust liquidity, strong balance sheet and cash flow generation ability will support shareholder-friendly initiatives. This will help the stock to sustain momentum for the remainder of fiscal 2021 and beyond.
Applied Materials topped the Zacks Consensus Estimate in three out of the trailing four quarters, with an average surprise of 6.4%.
In the last reported quarter, the company reported non-GAAP earnings of $1.39 per share, which outpaced the Zacks Consensus Estimate by 12 cents. Further, revenues of $5.16 billion surpassed the Zacks Consensus Estimate of $4.98.
Management believes that demand for foundry logic is expected to remain strong in the near term, courtesy of the rising need for specialty nodes in automotive, power, 5G rollout, IoT, communications and image sensor markets.
In addition, the company expects DRAM spending to increase in the days ahead. Moreover, its growing research and development activities, as well as innovative next-generation products are likely to drive growth going forward.
Moreover, aggressive share buyback will fuel the bottom line. The company expects non-GAAP earnings for the fiscal second quarter in the range of $1.44-$1.56 and revenues of $5.39 billion (+/- $200 million).
Cash Profile
As of Jan 31, 2021, cash and cash equivalents, short-term investments, as well as restricted cash and investment balance were $6.6 billion, up from $5.7 billion in the fiscal fourth quarter.
Moreover, Applied Materials generated $1.4 billion cash from operations in the last reported quarter. The company also paid $201 million in cash dividends.
Long-term debt was $5.449 billion at fiscal first quarter-end compared with $5.448 billion at fiscal fourth quarter-end.
Long-term earnings growth rates for KLA, TE Connectivity and Mettler-Toledo are projected at 11.6%, 10.4%, and 13.8%, respectively.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Applied Materials' (AMAT) Dividend Hike Boosts Shareholder Return
As a shareholder-friendly measure, Applied Materials (AMAT - Free Report) recently announced a hike in dividend payout. The move reflects the company’s sound financial position and intention to utilize free cash for enhancing shareholders’ returns.
It raised quarterly dividend by 9.1% to 24 cents per share from 22 cents. This new dividend, approved by its board of directors, will be paid on Jun 17, 2021 to stockholders of record as of May 27.
We believe that its portfolio strength, robust liquidity, strong balance sheet and cash flow generation ability will support shareholder-friendly initiatives. This will help the stock to sustain momentum for the remainder of fiscal 2021 and beyond.
Applied Materials, Inc. Price and Consensus
Applied Materials, Inc. price-consensus-chart | Applied Materials, Inc. Quote
Impressive Fundamentals Drive Growth
Applied Materials topped the Zacks Consensus Estimate in three out of the trailing four quarters, with an average surprise of 6.4%.
In the last reported quarter, the company reported non-GAAP earnings of $1.39 per share, which outpaced the Zacks Consensus Estimate by 12 cents. Further, revenues of $5.16 billion surpassed the Zacks Consensus Estimate of $4.98.
Management believes that demand for foundry logic is expected to remain strong in the near term, courtesy of the rising need for specialty nodes in automotive, power, 5G rollout, IoT, communications and image sensor markets.
In addition, the company expects DRAM spending to increase in the days ahead. Moreover, its growing research and development activities, as well as innovative next-generation products are likely to drive growth going forward.
Moreover, aggressive share buyback will fuel the bottom line. The company expects non-GAAP earnings for the fiscal second quarter in the range of $1.44-$1.56 and revenues of $5.39 billion (+/- $200 million).
Cash Profile
As of Jan 31, 2021, cash and cash equivalents, short-term investments, as well as restricted cash and investment balance were $6.6 billion, up from $5.7 billion in the fiscal fourth quarter.
Moreover, Applied Materials generated $1.4 billion cash from operations in the last reported quarter. The company also paid $201 million in cash dividends.
Long-term debt was $5.449 billion at fiscal first quarter-end compared with $5.448 billion at fiscal fourth quarter-end.
Zacks Rank & Other Key Picks
Currently, Applied Materials holds a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader computer and technology sector include KLA Corporation (KLAC - Free Report) , TE Connectivity Ltd. (TEL - Free Report) and Mettler-Toledo International, Inc. (MTD - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for KLA, TE Connectivity and Mettler-Toledo are projected at 11.6%, 10.4%, and 13.8%, respectively.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>