Linear Technology Corp. (
, a leading provider of low-power wireless sensor network (WSN)
technology, announced its decision to raise its quarterly
dividend by 1 cent to 26 cents per share.
Additionally, the board also consented to the payment of the
current quarter dividend in December, ahead of the customary
February timeframe, keeping in mind the interest of the
shareholders. Consequently, the increased dividend will be paid
on December 28, 2012 to stockholders of record as of December 17,
The 4% increase in dividend is encouraging and should support
share prices in the sluggish market. Given its size and scale of
operations, Linear generates steady cash flows and therefore
investors are welcoming the returns.
During the recently concluded first quarter of 2013, Linear
spent $5.1 million on share repurchases and $58.8 million on
dividends. The cash and short-term investments balance was $1.32
billion at quarter-end, increasing $116.9 million during the
Dividend hikes are a good way of encouraging investor
confidence as they return shareholder value. We remain encouraged
by Linear's strong cash position. Linear has been paying dividend
since 1992 and has increased it every year since then. The
current dividend yield is approximately 3%. We believe that
continuous hikes in dividend will inspire investor loyalty
through higher returns from the stock.
Linear reported decent first quarter results with both
earnings and revenue increasing sequentially. We think that
Linear's business is well-diversified among core markets and the
company would generate good results as the economy continues to
The weak second quarter guidance sent estimates plunging,
which also had the Zacks Consensus Estimate for the fiscal years
2013 and 2014 dropping significantly. As a result, Linear has a
Zacks Rank #5 (Strong Sell). We note that its archrivals,
Maxim Integrated Products, Inc.
) carry a Zacks Rank #3 (Hold).
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