Shares of Lam Research LRCX climbed nearly 5% to inch closer to their 52-week and all-time high after the company announced a new capital return program on Tuesday.
The wafer fabrication equipment company unveiled its plan to return at least 50% of free cash flow to Lam stockholders over the next five years. Lam also noted that, starting in the June quarter, it will increase its quarterly dividend by 120% to $1.10 per share.
Lam also announced an additional $2 billion share repurchase program, which brings its total authorization to $4 billion since Nov. 2017. The Fremont, California-based company hopes to execute this plan over the next 12 to 18 months.
"We continue to execute on our plan to increase shareholder returns through share repurchases and dividends over time as a complement to the substantial investments we are making to realize our long-term growth opportunities," CEO Martin Anstice said in a company statement.
Investors clearly seem pleased with today's announcements regarding Lam's large capital return venture, but they might be even more excited about the company's growth prospects.
Anstice's comments regarding the long-term growth potential of the data and memory storage driven economy are backed up by various industry experts, and more importantly, by Lam's current expansion projections.
Lam is expected to see its current-quarter earnings skyrocket by nearly 56% to $4.36 per share, based on our current Zacks Consensus Estimates. The tech firm is also expected to see its quarterly revenues surge over 32% to reach $2.85 billion.
What's more, Lam's full-year earnings are expected to skyrocket by nearly 68% to reach $16.74 per share. Investors will also be happy to note that the company has experienced a slew of estimate revisions recently, with 100% agreement to the upside for both its current quarter and full year.
Looking even further down the road, Lam is expected to see its EPS figure expand at an annualized rate of 14.9% over the next three to five years. Lam is also currently a Zacks Rank #1 (Strong Buy).
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