AMAT

Here's How Much Stock Applied Materials Repurchased in the Past Year

Applied Materials (NASDAQ: AMAT) is one of the largest providers of semiconductor manufacturing equipment. While demand for its products can be volatile, ebbing and flowing with the state of the economy and the semiconductor market, Applied Materials has seen its profits soar over the past decade. These profits provide the fuel for the company's expansive share-buyback program.

Spending billions on buybacks

Applied Materials announced a $10 billion share-buyback program in March of 2023. This added to the $4.7 billion the company already had authorized for share buybacks.

Here's how much stock Applied Materials bought back in each of the past four quarters.

Period Share Buybacks
Q1 2024 $700 million
Q4 2023 $700 million
Q3 2023 $439 million
Q2 2023 $800 million
Total $2.639 billion

Applied Materials generates more-than-enough cash to fund its share-buyback program. In the first quarter of fiscal 2024, which ended on Jan. 28, the company produced free cash flow of $2.1 billion.

Buybacks aren't always a good thing

While share buybacks reduce the share count and boost earnings per share, Applied Materials has been paying a hefty price to execute its multibillion-dollar share-buyback program.

Analysts expect the company to produce earnings per share of $7.78 in fiscal 2024, which puts the forward price-to-earnings ratio at about 26. While that may not look overly expensive, it's no bargain, either.

Share buybacks are a useful tool to boost earnings per share, but when companies pay too much for their own shares, all that spending may fail to propel the stock higher.

Should you invest $1,000 in Applied Materials right now?

Before you buy stock in Applied Materials, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Applied Materials wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of April 15, 2024

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Applied Materials. The Motley Fool has a disclosure policy.

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

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.