The semi-conductor sector is one of those which blows hot and cold, but one stock for dividend investors to consider is Linear Technology Corporation (LLTC). The company is a manufacturer of a range of linear integrated circuits.
Trading on a dividend yield of around 3% and a price to earnings multiple of around 15 times, Linear Technology (LLTC) provides access to the technology which is implemented in the telecommunications, cellular telephones, networking products, notebook and desktop computers, video, multimedia, industrial instrumentation and factory automation sectors.
Reporting first quarter results in October, the company delivered a 9% increase in earnings per share quarter on quarter to arrive with 0.59c a share while record quarterly revenues of $388.6m increased $22.4m or 6% over the previous quarter. Cash and cash equivalents increased sharply by $93.6m to $1.052m.
This is the sixth consecutive quarter that the company has grown revenues and the third consecutive quarter that the Company has achieved record quarterly revenues. Revenues grew 6% sequentially, at the higher end of guidance and more in-line with historical quarterly growth patterns after a year in which quarterly revenues grew sequentially 14%, 9%, 21% and 18%. The strategy of focusing on traditional analog end-markets (industrial, automotive and communications) has been instrumental in achieving these results.
With competitor Intel (INTC) also delivering a positive message to investors, the tech sector appears to be recovering some of its luster. In October, Intel (INTC) told investors, “Looking forward, the company continues to see healthy worldwide demand for computing products of all types."
With Linear Technology (LLTC) expected to pay down as much as $400m of its interest payments in November 2010 after calling its Convertible Senior Notes, this is likely to free up additional cash resources which could in turn be returned to shareholders if suitable growth opportunities are not identified.
There are increasing signs that consumer and industrial demand is rebounding and for dividend investors seeking a way of participating in this rebound then Linear Technology (LLTC) might be a stock to consider.
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