Linear Hikes Dividend - Analyst Blog
10 Dicembre 2012 - 10:30AM
Zacks
Recently, Linear Technology
Corp. (LLTC), 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, 2012.
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 quarter.
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 improve.
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, Texas Instruments (TXN),
Maxim Integrated Products, Inc. (MXIM) and
Analog Devices (ADI) carry a Zacks Rank #3
(Hold).
ANALOG DEVICES (ADI): Free Stock Analysis Report
LINEAR TEC CORP (LLTC): Free Stock Analysis Report
MAXIM INTG PDTS (MXIM): Free Stock Analysis Report
TEXAS INSTRS (TXN): Free Stock Analysis Report
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