key Takeaways:
- Applied Materials Inc. announced Monday it was raising its quarterly dividend 25%, to 40 cents from 32 cents a share.
- Applied Materials finance chief Brice Hill said the semiconductor equipment maker is confident its continued growth will provide enough profit to cover the dividend increase.
- Shares of Applied Materials, which hit an all-time high Thursday, slipped about 2% in Monday afternoon trading but are still up about 80% over the past year.
Applied Materials Inc. (AMAT) announced on Monday a significant boost to its quarterly dividend, increasing it by 25% from 32 cents to 40 cents per share. This decision comes amidst a period of record-high stock prices for the semiconductor equipment manufacturer, with its shares slipping approximately 2% during Monday afternoon trading.
Chief Financial Officer (CFO) Brice Hill emphasized that the dividend increase reflects Applied Materials’ capacity to generate profitable growth and robust free cash flow. Hill expressed confidence in the company’s ability to outperform its sector, citing expectations of double-digit growth in its services business and ample operating profit to support a growing dividend.
Applied Materials highlighted its track record of dividend growth, noting that it has raised its dividend for seven consecutive years. The last increase occurred in March 2023, when the dividend rose from 26 cents to 32 cents per share. At that time, Hill outlined the company’s intention to accelerate dividend growth, aiming to double the per-share amount over the next several years.
The newly increased dividend will be payable on June 13 to shareholders of record as of May 23.
Despite Monday’s decline in stock price, Applied Materials shares have surged by nearly 80% over the past year, reflecting strong investor confidence in the company’s performance and future prospects.
