April 18, 2025 a 10:46 am
AMAT: Dividend Analysis - Applied Materials, Inc.
Applied Materials, Inc., a stalwart in the semiconductor equipment sector, showcases a balanced dividend profile marked by consistent payouts and a promising yield amidst its technological innovations. With a robust balance sheet and strong profitability indices, the firm is well-aligned to maintain its dividend trajectory. Investors can find solace in its prudent payout ratios and predictable dividend growth, affirming its standing as a compelling dividend-generating opportunity.
Overview 📊
Identified as a key player in its sector, Applied Materials, Inc. offers insights into long-term stability with a dividend yield and growth trends that fuel investor confidence.
| Sector | Dividend Yield | Current Dividend Per Share | Dividend History | Last Cut or Suspension |
|---|---|---|---|---|
| Semiconductor Equipment | 1.21% | 1.44 USD | 21 years | None |
Dividend History 🗣️
Maintaining consistency in its dividend payment schedule, the company's historical payouts underscore its commitment to returning value to shareholders. Consistent payments over 21 years highlight a trajectory of stable capital distribution.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.86 |
| 2024 | 1.52 |
| 2023 | 1.22 |
| 2022 | 1.02 |
| 2021 | 0.94 |
Dividend Growth 📈
Examining the progression of dividend increases provides important insights into a company's financial health and strategic direction. The upward trend in dividend growth rates illustrates Applied Materials' commitment to enhancing shareholder value.
| Time | Growth |
|---|---|
| 3 years | 17.37% |
| 5 years | 12.86% |
The average dividend growth is 12.86% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio ✅
Payout ratios serve as a key indicator of dividend sustainability, providing insights into the proportion of earnings and cash flow utilized for dividends.
| Key Figure | Ratio |
|---|---|
| EPS-based | 18.50% |
| Free cash flow-based | 19.73% |
With an EPS payout ratio of 18.50% and an FCF payout ratio of 19.73%, the payout appears manageable, indicating a buffer for future dividend increases even amidst earnings fluctuations.
Cashflow & Capital Efficiency 💡
Examining cash flow stability and capital efficiency is paramount to understanding the intrinsic fundamentals and adaptability of financial operations, especially in capital-intensive industries.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.88% | 6.90% | 5.99% |
| Earnings Yield | 4.68% | 6.23% | 8.48% |
| CAPEX to Operating Cash Flow | 13.71% | 12.71% | 14.58% |
| Stock-based Compensation to Revenue | 2.12% | 1.85% | 1.60% |
| Free Cash Flow / Operating Cash Flow Ratio | 0.86 | 0.87 | 0.85 |
Figures reflect a disciplined approach to capital deployment with strong free cash flow generation, securing future investment and dividend payouts amidst variable market conditions.
Balance Sheet & Leverage Analysis 📉
Evaluating the balance sheet and leverage offers clarity on financial stability, liquidity standing, and the discipline of debt financing, essential for risk assessment and sustainability analysis.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.33 | 0.37 | 0.45 |
| Debt-to-Assets | 0.18 | 0.20 | 0.21 |
| Debt-to-Capital | 0.25 | 0.27 | 0.31 |
| Net Debt to EBITDA | -0.21 | -0.02 | 0.43 |
| Current Ratio | 2.67 | 2.60 | 2.16 |
| Quick Ratio | 1.87 | 1.82 | 1.35 |
| Financial Leverage | 1.81 | 1.88 | 2.19 |
These metrics denote a robust liquidity framework and tactful debt management strategy, highlighting resiliency against macroeconomic downturns and competitive market pressures.
Fundamental Strength & Profitability 📈
A critical understanding of profitability and core financial strengths is imperative for assessing value creation capacity and maintaining competitive dynamics.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 37.77% | 41.94% | 53.51% |
| Return on Assets | 20.86% | 22.31% | 24.41% |
| Margins: Net | 26.41% | 25.86% | 25.31% |
| EBIT Margin | 28.95% | 29.96% | 30.35% |
| EBITDA Margin | 30.39% | 30.81% | 31.91% |
| Gross Margin | 47.46% | 46.70% | 46.51% |
| R&D to Revenue | 11.90% | 11.70% | 10.75% |
The superior return ratios coupled with healthy margins elucidate a strong profitability framework, maintaining the firm's edge through innovation-led growth and strategic cost management.
Price Development 📈
Dividend Scoring System 📊
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 5 | |
| Financial Stability | 5 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 35/40
Rating 🏆
Given Applied Materials’ robust dividend profile, consistent growth, financial resilience, and efficient capital management, it maintains a commendable position as a reliable dividend-paying entity. The company's balance sheet strength and profitability further support a positive outlook, making it an attractive option for dividend-focused investors. Applied Materials receives a strong buy recommendation for those seeking stable and growing dividend income.