Chip manufacturing businesses have remained largely unaffected by the global economic crisis with most of them running at a profit. This is partly due to the fact that the global market for sophisticated computer devices, PCs, laptops and smartphones has dramatically increased over the years. This has led chip stocks to invest in smarter ventures, explore more lucrative markets and offer a more innovative range of products. In this article, I will discuss five stocks that have maintained a positive trend of sustained revenue growth, reported higher earnings per share than their peers, and declared sizable dividends at the end of the fiscal year.
ASM International (ASMI) is a Dutch semiconductor manufacturing company with shares listed on Nasdaq and Euronext Amsterdam. The company is currently on a recovery track having sustained substantial losses in 2009 and the first quarters of 2010. Since then, ASM International has performed well amidst favorable investor sentiment and market conditions that have been conducive of trade. Consolidation in semiconductor equipment in the last quarter of 2011 helped the company save on costs and it has since then been able to stretch its current streak of positive growth so far in the first quarter of 2012. ASM international is currently having a good run in the stock market and investor sentiment has been favorable for the business. The stock is currently trading at a price of $35 with a 52-week range of $21 to $45. Market capitalization is nearly $2 billion with an average trading volume of almost $36,000. The company has so far managed a good price to earnings ratio of almost 17 and at earnings per share of more than $2 ASM International is offering almost 60c to investors in dividends. Seeing how the company has managed to pull itself out of the quagmire of economic crisis and posted a quick recovery, ASM International is a lucrative and viable investment option for 2012.
Avago Technologies (AVGO), although an American company now, was previously the semiconductor products division of Hewlett Packard. In 2011, the company's earnings for the fourth quarter fell below the projected figures estimated by leading financial analysts. This was largely the result of higher expenses and reduced sales in a saturated global market. However, the company is still the owner of more than 5,000 patents and it seems to have capitalized on the fact lately. Avago Technologies has started the first quarter of 2012 with an upbeat spirit and on the right footing. Come January and the company has enjoyed favorable investor sentiment in the market with trading price high at nearly $35 after slipping as low as $26 I the previous year. The total market capitalization of the business is close to $9 billion with an average trading volume of nearly $2.5 million. Price to earnings ratio is close to 16 and Avago is currently giving out 12c in dividends on earnings per share of a little more than $2. The company enjoys a good dividend history with a yield of close to 2%. The company has recently announced important breakthroughs in chip technologies such as the new Front-End Module. The company also plans tom make a new revolutionary chip available to the market that would encourage thinner cameras. All these developments have had a positive impact on this stock which has recently received favorable investor sentiment. Avago is set to widen its competitive moat in the first two quarters of 2012 with important breakthrough in chip technology.
Advanced Micro Devices (AMD) is a multinational company based in America and earns revenues through sale of semiconductor chips. The company is ranked among the market leaders in designing and manufacturing of state-of-the-art computer processors and other related technologies for commercial and consumer markets. Advanced Micro Devices has a market capitalization of more than $5 billion with average trading volume exceeding $15 million. Trading price for shares has been stable lately at around $7 after slow market activity led to a sharp decline in stock price with trading price reaching as low as $4 in the last 52-weeks. To add to it, the last three quarters have not favored the business with realized revenues and growth levels considerably below projected figures. However, January has been particularly good for the business and the business has recently enjoyed a good run in the market with decent trading amidst favorable investor sentiment. The company's shares were seen trading higher than previous levels with a rise of more than 3% in trading prices. The major competitor and arch-rival of Intel has also shown great resiliency in the market in the wake of tough economic indicators announcing plans to increase its market share by introducing a revolutionary graphics card. Judging from the current financial performance of the business and prevailing market conditions, I recommend buying shares of Advanced Micro Devices today.
Maxim Integrated Products (MXIM) is a public limited stock rated company that earns the majority of its revenues through designing, manufacturing and trade of analog/ mixed-signal semiconductor products. The company has enjoyed a good market share for the sale of integrated circuits mainly to computing, consumer, communications and industrial markets. The company has established itself as a global entity with design centers and production facilities spread across many countries of the world. 2011 was a favorable financial year for the company where, after a sluggish start to trading activity, Maxim integrated recorded sizable revenues of nearly $3 billion. Leading into the current financial fiscal, the company has positive financial indicators with favorable investor sentiment. The company currently has a massive market capitalization exceeding $8 billion with average trading volume of nearly $3 million. Trading price of the stock is currently poised at $27 after a 52-week range of $20 to $28. Maxim has a price to earnings ratio of more than 17 and on earnings per share of around $1.6; the company gives nearly 25c to investors in dividends. Maxim Integrated recently approved repurchase of up to $750 million in stock, and this is expected to appeal to investors and lead to more positive trading levels for the business. Also, the unveiling of the new fully integrated USB 2.0 protectors is expected to widen the company's competitive moat leading to higher revenue generation and greater profitability.