Microchip Technology Keeps Lifting Its Dividend


Cisco Systems ( CSCO ),Microsoft ( MSFT ) andOracle ( ORCL ) are not the only tech companies that pay shareholder dividends.Microchip Technology ( MCHP ), a maker of semiconductor products for the automotive, communications and computer and other markets, also does so.

The Chandler, Ariz.-based firm has rewarded stockholders with cash dividends since the third quarter of its fiscal 2003. Microchip has long paid dividends before Cisco and Oracle.

Microchip has raised its dividends by small increments in just about every quarter since it started paying them. In May, the company lifted its dividend to 35.35 cents a share from 35.3 cents. That marked its 37th hike since the inception of its dividend program.

On an annual basis, Microchip pays $1.414 a share. This works out to a yield of about 3.5%, which is higher than the 2.4% in the S&P 500. Microchip has one of the highest yields out of the 16 dividend-paying stocks in the Electronics-Semiconductor Manufacturing group.

The chip industry is highly cyclical, and this is reflected in Microchip's earnings history. Profit fell in two of the past five fiscal years. In May, the company reported flat earnings for its fiscal 2013 ended March. In fiscal 2012, profit and revenue dropped 21% and 7%, respectively.

But Microchip has had some good news recently. In June , the company raised guidance on profit and revenue for its fiscal Q1 2014, which ended June 30. Analysts polled by Thomson Reuters see earnings rising 21% to $2.28 a share for the current fiscal year.

Microchip is trading near its best levels since May of 2011 after bouncing off its 10-week moving average. The stock cleared a lopsided flat base in May, but then traded in choppy fashion afterward.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Investing Ideas

Referenced Stocks: CSCO , MCHP , MSFT , ORCL

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