In an effort to enhance shareholders’ return, Lam Research Corporation (LRCX - Free Report) , one of the largest global manufacturers of semiconductor equipment, recently increased its quarterly dividend by about 50% to 45 cents a share from the prior payout of 30 cents. The increased dividend will be paid on Jan 4, 2017 to stockholders on record as of Dec 14, 2016.
Concurrently, the board authorized the company to buy back up to $1 billion worth shares, which can be executed over the next 12 to 18 months. The new program will replace the remaining balance from any prior authorization. Repurchases may be made through both public market and private transactions or may include the use of derivative contracts and structured share repurchase agreements.
Lam Research has a strong capital management policy in place. The company’s initiatives are well supported by its solid cash flow generation, which in turn is driven by sustained solid operational performance.
During the recently concluded fiscal first quarter, Lam Research paid $48.1 million in cash dividends to stockholders. Cash and cash equivalents, short-term investments, and restricted cash and investment balances were $7.2 billion compared with $7.0 billion at the end of fiscal fourth-quarter 2016. We remain encouraged by Lam Research’s strong cash position and its ability to service its long-term debts.
The regular share buybacks and dividend hikes are a good way of building investor confidence as these return shareholder value. The company expects to post revenues of approximately $1.84 billion (+/- $75 million) in the upcoming quarter. The increase in dividend indicates that the company is heading toward strong growth.
Currently, Lam Research has a Zacks Rank #1 (Strong Buy). Some other stocks worth considering in the industry include Cognex Corporation (CGNX - Free Report) , Itron, Inc. (ITRI - Free Report) and Teradyne Inc. (TER - Free Report) also with a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cognex Corporation delivered a positive earnings surprise of 24.92% in the trailing four quarters.
Itron, Inc. delivered a positive earnings surprise of 30.55%, on average, in the trailing four quarters.
Teradyne Inc. delivered a positive earnings surprise of 19.26% in the trailing four quarters.
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