CHANDLER, Ariz. - Microchip Technology Incorporated (NASDAQ: NASDAQ:MCHP), a prominent provider of embedded control solutions, announced today that its Board of Directors has approved an increase in the company's quarterly cash dividend. The dividend has been raised to 45.0 cents per share, a 25.7% increase from the February 2023 dividend of 35.8 cents per share.
The upcoming dividend is scheduled to be paid on March 8, 2024, to shareholders of record as of February 23, 2024. This marks the 86th consecutive quarter of dividend payments by the company, reflecting a consistent commitment to shareholder returns since the initiation of quarterly dividends in the third quarter of fiscal year 2003.
Despite experiencing financial results in December 2023 that did not meet their guidance, Microchip emphasized the robust cash generation of the company. Executive Chair Steve Sanghi expressed confidence in this financial strength and reiterated the company's pledge to continue rewarding its stockholders. He noted that the increased dividend demonstrates their confidence in the cash-generating capabilities of Microchip's operations.
Furthermore, Sanghi reaffirmed the company's goal to return 100% of its adjusted free cash flow to shareholders by the March 2025 quarter, despite current market challenges.
The information in this article is based on a press release.
InvestingPro Insights
In light of Microchip Technology's recent dividend increase, investors might find the following insights from InvestingPro particularly relevant. The company's steadfast commitment to shareholder returns is underscored by its high shareholder yield and a track record of raising its dividend for 12 consecutive years. Notably, Microchip has managed to maintain dividend payments for 22 consecutive years, which is a testament to its financial robustness and dedication to its stockholders.
From a valuation standpoint, Microchip is currently trading at a low P/E ratio relative to near-term earnings growth, with a P/E ratio of 18.57 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at 18.26. This could suggest that the stock is undervalued considering its earnings potential. Additionally, the company's revenue growth remains strong at 17.1% over the last twelve months as of Q2 2024, highlighting its operational success despite broader market challenges.
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