Materials engineering solutions company Applied Materials, Inc. (NASDAQ: AMAT) recently announced a quarterly dividend of $0.26 per share, an 8.3% increase from the previous dividend of $0.24 per share.
Following the news, shares of the company slipped 1.1% to close at $123.64 on Friday.
The dividend will be paid on June 16, 2022, to shareholders of record as of May 26, 2022.
The company’s annual dividend of $3.12 per share now reflects a dividend yield of 2.5% based on Friday’s closing price.
The company has been raising its dividend consistently over the past four years, making it an attractive choice for investors.
Share Repurchase
The company’s board has also approved a new $6 billion share repurchase program in addition to the previous authorization that had $3.2 billion remaining at the end of the first quarter of Fiscal 2022.
Management Commentary
The CEO of Applied Materials, Gary Dickerson, said, “The new share repurchase authorization and dividend increase demonstrate Applied Materials’ confidence in the long-term growth of our markets, the strength of our technology, and our ability to generate strong cash flow and attractive shareholder returns. Our broad portfolio of innovative products puts Applied in a great position to outperform our markets in the years ahead.”
Stock Rating
Recently, Stifel Nicolaus analyst Patrick Ho reiterated a Buy rating on the stock with a price target of $190, which implies upside potential of 53.7% from current levels.
The analyst said, “We believe these announcements support the view that the company will be generating strong cash flow, not only in 2022 but over the next several years. We believe the dividend increase and buyback also highlight Applied’s shareholder return strategy, and how it remains committed to returning excess cash to shareholders. We believe the recent market pullback represents an attractive buying opportunity for one of our most preferred large cap names. We maintain our Buy rating on the shares.”
Consensus among analysts is a Moderate Buy based on 12 Buys and 6 Holds. The average Applied Materials stock prediction of $176.24 implies upside potential of 42.5% from current levels. Shares have gained 7.6% over the past year.
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