Lam Research Corp. : LRCX-US: Dividend Analysis : March 08th, 2017 (record date) : By the numbers : April 3, 2017

Our analysis is based on comparing Lam Research Corp. with the following peers – Applied Materials, Inc., Axcelis Technologies, Inc., KLA-Tencor Corporation, CVD Equipment Corporation, ASM International N.V. ADR, Amtech Systems, Inc. and Veeco Instruments Inc. (AMAT-US, ACLS-US, KLAC-US, CVV-US, ASMIY-US, ASYS-US and VECO-US).

Lam Research Corp.’s dividend yield is 1.17 percent and its dividend payout is 24.28 percent. This compares to a peer average dividend yield of 1.17 percent and a payout level of 25.14 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 92 out of a possible score of 100 looks sustainable.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to December 31, 2016), LRCX-US paid a high quality dividend, which represents a yield of 1.05% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during 2 of these years — of these 1 was high quality and 1 was medium quality.
  • The ending cash balance, with a dividend coverage of 30.49x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to December 31, 2016), LRCX-US paid a high quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 7.76x), investing cash flow (coverage of -5.19x), issuance cash flow (coverage of 1.24x) and twelve-month prior cash (coverage of 23.40x), for a total dividend coverage of 31.49x.

LRCX-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.28x). Thus, the total coverage including share buybacks is 31.78x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.

Dividend History

Item 2012-06-30 2013-06-30 2014-06-30 2015-06-30 2016-06-30 Latest
Dividend Yield (%) 0 0 0 0.88 1.44 1.17
Dividend Payout (%) 0 0 4.97 22.7 22.99 24.28

A complete list of metrics and analysis is available on the company page.

Company Profile

Lam Research Corp. engages in the manufacture and service of wafer processing semiconductor manufacturing equipment. Its products include front-end wafer processing, back-end wafer-level packaging, and other related products. The company also designs, manufactures, markets, refurbishes, and services semiconductor processing systems that are used in the fabrication of integrated circuits. Lam Research was founded by David Lam on January 21, 1980 and is headquartered in Fremont, CA.


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