Applied Materials Boosts Dividend and Launches Buyback to Boost Returns

Applied Materials Announces Dividend Increase and Buyback Program

Recently, Applied Materials, Inc (NASDAQ: AMAT) reinforced its commitment to shareholder returns with the announcement of a 15% hike in its quarterly cash dividend. This marks an impressive achievement as it represents eight years of consecutive dividend increases.

Details of the Dividend Increase

The company will now provide a quarterly dividend of 46 cents per share. Shareholders can expect this payment to be made on June 12. Previously, the dividend was set at 40 cents, showcasing Applied Materials' dedication to rewarding its investors through consistent cash flow.

New Share Repurchase Authorization

Alongside the dividend increase, Applied Materials' Board has also approved a substantial share repurchase program, allowing for the buyback of an additional $10 billion worth of shares. This move is a continuation of their commitment to returning capital to shareholders, supplementing the leftover $7.6 billion from prior authorizations at the conclusion of the last fiscal quarter.

Strong Financial Performance

Applied Materials has demonstrated solid financial performance over the years. CFO Brice Hill recently noted that nearly 90% of the company's free cash flow has been returned to shareholders over the past decade. In the latest quarter, Applied Materials generated an impressive $925 million in cash from operations, further reinforcing its stable financial position with $8.21 billion in cash and equivalents at hand.

Quarterly Results and Future Expectations

For the first quarter, Applied Materials reported revenue of $7.17 billion, exceeding analyst predictions of $7.14 billion. The company also announced an adjusted earnings per share (EPS) of $2.38, surpassing expectations once more. Looking forward, the company anticipates revenue between $6.7 billion and $7.5 billion for the next quarter, while adjusted EPS is projected to range from $2.12 to $2.48.

Market Reception

Despite its strong financials, the stock experienced a slight decrease of approximately 2.11% in premarket trading following the announcement, trading at around $152.40. Analysts remain optimistic about Applied Materials' long-term growth potential, particularly in the Wafer Fab Equipment sector.

Analyst Insights

Experts like Goldman Sachs’ Toshiya Hari have identified Applied Materials as a key player poised for growth within its market. On the other hand, KeyBanc’s analyst Steve Barger has indicated that new trade restrictions with China may impact the company by roughly $400 million in fiscal 2025, a factor investors will need to monitor closely.

Conclusion

Through strategic financial decisions like increasing its dividend and authorizing a significant stock buyback, Applied Materials continues to prioritize shareholder value. As the company navigates the complexities of the semiconductor industry, its ongoing commitment to returning cash to investors reflects confidence in its long-term strategies.

Frequently Asked Questions

What is the new dividend per share for Applied Materials?

Applied Materials has raised its quarterly dividend to 46 cents per share.

How much is the new share repurchase program worth?

The company has authorized a new share repurchase program of $10 billion.

What were Applied Materials' recent revenue results?

The company reported first-quarter revenue of $7.17 billion, surpassing analyst expectations.

Who are some analysts tracking Applied Materials?

Analysts from firms like Goldman Sachs and KeyBanc are closely monitoring the company, with optimistic long-term forecasts.

How does Applied Materials' dividend strategy benefit investors?

The increase in dividends and share repurchase programs are part of the company's strategy to boost overall shareholder returns.

About The Author

Olivia Taylor here, a 26-year-old writer and financial advisor. After earning a degree in finance, I worked in the sector for years. I've always loved numbers and had a talent for simplifying difficult financial ideas so that anyone could understand. I wrote my first book because of this passion; it helps readers take charge of their financial futures by fusing real-life stories with useful financial advice.

Whether they are just beginning their careers, preparing for significant life events, or seeking to invest wisely, my goal with my writing is to enable people to make educated financial decisions. The foundation of my work is the conviction that security and freedom of the individual are largely determined by financial literacy. To further financial education, I run workshops and frequently write for financial blogs in addition to my books.

I like to travel, experience other cultures, and find inspiration in daily life when I'm not writing or examining market trends. My passion is utilizing sound financial practices to help people reach their financial objectives and lead the best lives possible.

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