Applied Materials Inc

[crimsonghost747]

Ok guys, here is what I see.

Positives:
Good sector with a lot of potential both now and in the future
Great EPS growth in recent history
Nice cash generation
Low payout ratio
Cash > debt

Negatives:
Tech (you never know when something new comes up and completely changes the game)
Share price is close to ATH
Minimal yield of around 1.1%
Very slow dividend growth

Obviously I'm worried about the 3 things in the negatives column.. the share price is not a crucial thing seeing as this would be a very long term investment, however I do get the feeling that if I buy now I might be a little late to the party. The valuation isn't that bad though when looking at how well 2017 has started.

As for the dividend. Well that profit has to go somewhere... debt is not an issue (especially at today's interest rates) and the company does seem to be slowing down it's repurchases, though it's still making them but not nearly as fast as it has done in recent history. So... where does the cash go? They will obviously have to find some use for it, though as of right now I can't find any info on the dividend being a priority... but they could certainly afford to start raising it.

So... it looks interesting but doesn't really fit well into the whole dividend growth way of thinking. At least not yet.
What do you guys think?

[ChadR]

I like the stock, but I've never bought it since I couldn't get past the low dividend and low dividend growth. I can handle a low yield, but I want the growth to be much higher than what AMAT has.

[crimsonghost747]

Well, I tipped my toes in around the time of the first post and added a little more about a week ago. I might have also added a little sometime in between, I can't remember exactly. In any case, it's still one of my smaller holdings. (unfortunately) Hindsight is a wonderful thing.. I should have bought a lot more in the beginning. :p

Some lovely q2 news:
"Compared to the same period last year, net sales increased by 45 percent to $3.55 billion; gross margin grew 4.1
points to 45.1 percent; operating margin increased by 9.2 points to 26.5 percent; and earnings per share (EPS) grew
162 percent to $0.76."

[divmenow]

I actually bought some AMAT after it sold off from its highs today. This stock is positioned very well and that was such a nice quarter. Stock could trade to $55 by years end. Very undervalued with that growth rate. Nice company!