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Shares of Avnet Inc. (AVT - Analyst Report) reached a new 52-week high of $39.86 on Aug 13, 2013. Avnet shares gained momentum since it announced fourth quarter 2013 results last week. Apart from this, the announcement of dividend initiation also helped the stock to surge.

The closing price of this information technology and provider on Aug 13, 2013 was $39.85, representing a 1-year return of about 22.5% and a year-to-date return of about 25.0%. Average volume of shares traded over the last three months stands at approximately 657.8K.

This Zacks Rank #2 (Buy) company has a market cap of $5.47 billion and a long-term expected earnings growth rate of 13.4% (higher than industry average of 13.0%).

Growth Drivers

During the last quarter, Avnet witnessed revenue growth with support from two of its business segments. Geographically, contributions from Asia and Americas were relatively soft but Europe was solid despite continuing macro issues.

Margins, though below the year-ago levels, benefited from the ongoing cost reduction measures.

Avnet is also initiating a quarterly dividend of 15 cents a share and the payment will be made on Sep 20, 2013. Avnet also stated its intention to maintain the trend of returning value to shareholders.

Avnet had a sizable cash balance and generated solid cash from operations in the last quarter.

Estimate Revision

The Zacks Consensus Estimate for 2013 and 2014 rose 5 cents and 12 cents to $4.23 and $4.67 per share, respectively, in the past 7 days. The upside revision was supported by 6 and 3 estimate revisions for fiscal 2013 and 2014, respectively, over the past 7 days.

Conclusion

We think that the dividend announcement will increase shareholder loyalty. Overall, we are positive on Avnet due to its acquisition strategy (for market share growth, product portfolio enhancement and geographic reach expansion) and continuous investments to tap changing demand.

Other Stocks to Consider

Other stocks in the technology industry that are currently performing well and have a solid visibility include Quantum Corp. (QTM - Snapshot Report), Semiconductor Manufacturing International Corp. (SMI - Snapshot Report) and SanDisk Corp. (SNDK - Analyst Report), all with a Zacks Rank #1 (Strong Buy).

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